Statistics Canada’s November 2014 Labour Force Survey (LFS) release generated the typical headlines, like Canada lost 10,000 jobs in November (courtesy CBC News). The associated write-ups highlighted bank economists’ ‘cautious optimism’, as they have for a number of years now. While Statscan’s brief report twice mentioned significant self-employment gains, both month-to-month and year-over-year, most national news reports (like CBC News’) omitted any such mention. As the saying goes, you can only lead a horse to water.
The almost statistically insignificant changes reported in the latest and last LFS release of the year nevertheless merit mention, if only for reflecting the year that was(n’t) in the Canadian labour market.
Employment class, type, wages
The November 2014 LFS-estimated monthly employment changes fell well below the reported standard errors for the estimates (which aren’t the actual standard errors for the estimates, but that’s another topic). Table 2 of the release indicates the estimated number of employees fell 23,000 as the number of self-employed rose 12,300 over the preceding month; the standard errors for these estimated changes were 35,700 and 25,500, respectively. That is, the changes were relatively meaningless (hence the asterisk in the title).
That said, Table 2 also indicates self-employment accounted for 27 percent of total LFS-reported year-over-year employment gains. That’s up from a 20 percent share of year-over-year gains reported in the November 2013 LFS release. For context, the November 2013-2014 figures represent an estimated rise in self-employment of 1.4 percent, double the rise in number of employees (0.7 percent).
The silver lining bank economists supposedly saw in the report was that monthly job losses were mostly in part-time employment. As Table 1 of the November 2014 LFS release indicates, part-time employment fell an estimated 16,300 as full-time employment rose 5,700. (Here again the estimated changes were well below the standard errors for the estimates, 36,100 and 39,200, respectively.)
When larger losses in the number of employees are tempered by moderate gains in self-employment, is an estimated drop in part-time employment positive news?
Similarly, when relatively fewer workers report wage earnings, and given the LFS doesn’t collect self-employment earnings, is an estimated rise in average wages all that meaningful?
The intuitive answer to both questions is ‘no’ – which is at odds with what has been and continues to be reported.