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After four months of terrible economic data, last week’s employment report from Statistics Canada contained some very welcome good news for a change.

The headline growth in jobs (almost one million more Canadians were working in June, compared to May) was very encouraging, much better than expected. By that measure, Canada’s labour market has climbed almost halfway back out of the hole we fell into from February through April. 

But the next steps of job recovery will be much harder to achieve. The share of remaining unemployed Canadians expecting to go back to their former jobs has fallen substantially (just one-third now). We are experiencing a wave of second-order layoffs as companies permanently downsize because their market isn’t coming back. Recent examples of that (all in the hard-hit transportation sector) include Air Canada (20,000 layoffs), WestJet (3,300 layoffs), Bombardier (2,500 layoffs), and VIA Rail (1,000 layoffs).

The official unemployment rate (12.7 per cent) is still just the tip of the iceberg of true underutilization in the labour market. Counting people nominally employed but not working, and those who’ve given up looking, a more realistic measure of unemployment is 21-22 per cent. That’s a lot better than April (when a realistic unemployment rate was more like 35 per cent), but it’s still a historic crisis, and will require sustained leadership from government to rebuild employment for years to come.

I have argued that the recovery might be shaped like this: a quick but partial rebound as direct health restrictions ease, followed by long “bouncing along” as more traditional demand-side impacts of a downturn are experienced.


(One Twitter follower aptly called this shape a “Loch Ness Monster Recovery”!) We will need sustained government leadership — akin to rebuilding an economy after a war (as I argued recently) — to escape that “bouncing along” stage of recovery, and continue working our way back toward true full potential.

In fact, I think we’re already getting close to the limit of the automatic job recovery we can expect from simple relaxation of health restrictions: that is, the end of that partial upward arm of the “V.” And as we have seen in the U.S., Victoria in Australia, and elsewhere, this monster will snap back to life when it sees any opening. So hard work is ahead.

This was a busy week for Canadian economic data, with today’s labour force report coming on the heels of Wednesday’s federal government “fiscal snapshot.” Most observers thought the snapshot was bad news, because it forecast an enormous $343 billion deficit. But in fact, that big deficit is the flip side of the coin of today’s good jobs numbers.

The two are clearly related: Without the enormous injections of government support (for household incomes, to keep workers on payrolls, to fight the health battle against COVID-19) that caused that big deficit, today’s job numbers would have been much more dire.

Today’s report also highlighted again the brutally unfair concentration of this recession on the backs of those who can least afford it. Job losses since February among workers earning under $16 per hour (the bottom fifth of the labour market) have been almost seven times worse than for other workers.

Women, young workers, workers in temporary and insecure jobs (including gig workers), immigrants and migrant workers, have all also experienced disproportionate harm from the crisis. Ongoing policy responses (including both income supports and job-creation measures) must be focused on those hard-hit groups, or else we will experience a destructive polarization of well-being and opportunity that, among other consequences, will weaken our capacity to respond effectively to future public health emergencies.

Our recent Centre for Future Work report on “Ten Ways the COVID-19 Pandemic Must Change Work for Good” contained more detailed statistics on the unfair concentration of job losses among lower-wage and insecure groups of workers. 

In sum, today’s report is encouraging. But it confirms we are still locked in a historic, brutally dis-equalizing economic and labour market crisis. It can be fixed. But we will need continued ambitious (and expensive) leadership from government — in short, a multi-year reconstruction plan to rebuild the economy after the “war” against COVID-19 — to keep on repairing the damage.

Jim Stanford is economist and director of the Centre for Future Work, and divides his time between Vancouver and Sydney. He tweets at @JimboStanford.

Image: TheDigitalWay/Pixabay

Jim Stanford

Jim Stanford is economist and director of the Centre for Future Work, and divides his time between Vancouver and Sydney. He has a PhD in economics from the New School for Social Research in New York,...