Will a 40-year low in unemployment help the Liberals win re-election?

Prime Minister Justin Trudeau makes a skills and training announcement. Photo: Adam Scotti/PMO

The economic news last week was welcome. Canada has hit a 40-year low in unemployment, according to a Statistics Canada report released May 10.

The Liberal Party -- trailing the Conservative opposition by a big six-point margin in opinion polling -- wants to make some political gains from the strong job creation numbers: over 100,000 new jobs in April.

Expect to hear a lot about how the Liberal government has managed the economy so as to benefit Canadians, from now until the October 21 federal election.

Political science research suggests that governments can lose elections when unemployment numbers go up sharply while they hold power.

Unfortunately for Justin Trudeau, it has not been shown that governments win because unemployment is low.

Focusing on job creation does make political sense for all political parties because economic security is a major voter preoccupation.

While people value jobs and incomes, connecting employment prospects to political choices is not always obvious.

Governments routinely justify tax breaks and direct subsidies to corporations on the grounds that they create jobs. Conservative parties like to pass off tax cuts for the wealthy as job creating.

The reality is that while Canada counts job vacancies through the job bank, no recent federal government has had an explicit job creation strategy. Indeed, fiscal austerity and the pursuit of international trade deals have caused job losses and imposed economic hardships for many Canadians.

A recent opinion survey showed that 46 per cent of Canadians were having trouble making ends meet. Fully 31 per cent responded that they did not make enough money to pay their monthly bills and debts. 

Despite lower unemployment rates, there are nearly five post-secondary graduates for every job opening that requires a university or college degree.

There is no plan to ensure work for the half a million people seeking a first-time job each year. Highly qualified recent immigrants continue to experience higher unemployment rates than other Canadians but not enough attention is given to their special needs.

The one-in-two part-time workers seeking full-time jobs are left to their own devices, as are the underemployed -- the millions of Canadians in jobs they would happily trade for something better.

No government has figured out what to do with the long-term unemployed such as the Alberta victims of the fall in oil prices.

At the end of the 1970s General Motors had 450,000 employees worldwide and 80,000 in Oshawa; after its recent layoffs, there will be 40,000 employees worldwide and 300 in Oshawa.

Despite decades of seeing that corporate restructuring meant job losses, Canada has failed to adopt a visible, extensive jobs strategy, let alone specific help for those who have lost their jobs through no fault of their own.

Manufacturing job losses following the 1988 Canada-U.S. trade deal were supposed to be cushioned by "adjustment programs." Instead access to unemployment insurance was cut back by the Mulroney Conservatives and benefits reduced.

In the 1995 budget the federal Liberals eliminated the national social safety net, leaving it up to provincial governments to provide for social welfare -- with no guarantee it would be available for all. Job retraining was also left to the provinces.

The Centre for the Study of Living Standards (CSLS) has asked why Canadian wages have stagnated for decades while Canadian workers have been producing more each year. From 1976 to 2014 median real hourly wages increased by only 0.1 per cent yearly, despite productivity gains of 1.1 per cent per year.

With only meagre wage gains, why expect Canadians to applaud the Liberal government for its economic action? Indeed, expect opposition parties to attack the government on the issue of affordability of daily life in Canada.

If the Canadian job market were truly robust, wages would have caught up to productivity, but this has not happened.

The Bank of Canada continues to be focused solely on inflation. Indeed when the senior deputy governor "looks under the hood" of the Canadian job market, Carolyn A. Wilkins sees wage growth as a "risk" to be managed, implying increased interest rates, making things worse for indebted students and families.

For over 70 years governments have expected economic growth to take care of job creation. Today, economic growth as a goal is problematic.

In an age when climate change is the main preoccupation, explicit government planning for job and earnings growth is what is needed to accompany a democratic transition to a green economy.

Developing comprehensive employment strategies should be an obvious political option for governments and opposition parties alike.

Duncan Cameron is president emeritus of rabble.ca and writes a weekly column on politics and current affairs.

Photo: Adam Scotti/PMO

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