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Employment Transparency

The jobless (non)recovery: R4, R8 and why the spread matters

Canada’s job market struggles for growth
Tavia Grant, Globe and Mail, March 9, 2012

As usual, no mention of the rate that includes discouraged job-seekers, the involuntarily un(der)employed and those waiting to return to work.

Back at the outset of the ‘economic downturn’ that no one at Statcan was allowed to call a recession, a number of economists noted the LFS seemed slow to capture the rise in unemployment.  That is in large part due to a quasi-cohort effect stemming from the design of the survey.

Nevertheless, the LFS did start to capture steadily increasing unemployment after October 2008, and that is commonly used as the starting point in analysing the employment effects of the recession.  That month, the spread between the official unemployment rate (R4) and the ‘real’ unemployment rate (R8), was 2.4%.  In July 2009, at the height of the reported LFS unemployment rate during the recession, that spread had grown to 3.7%.  Today? You guessed it: 3.7%.

And that’s without even getting into the issues of job losses by industry sector or self-employment during recessionary cycles.   One can’t honestly say there has been a recovery in the labour market with numbers like this.

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