An economic slowdown promises a tougher job market
The employment challenge
An economic slowdown promises a tougher job market
Dora Georgiopoulos knows a thing or two about unemployment. In 1993, the 33-year-old Toronto area woman lost her job as a customer service representative when her employer, an automotive software manufacturer, went through a corporate restructuring. Within six months, though, she had landed a new position: counselling unemployed workers and leading job search seminars for a nonprofit organization. Georgiopoulos now manages the Etobicoke Job Finding Club, a federally funded group offering two-week courses in résumé writing and interview techniques. In the current economic climate, both skills are critically important, she says. While Canada’s national unemployment rate has remained stubbornly high, the fate of those without jobs varies widely by province. In Ontario, the economy is doing well and job searches are often successful. “I’ve never seen the job market so busy,” she says. “Five years ago, 50 per cent of our people were finding work. This year, our success rate is over 70 per cent.” But with 1.3 million Canadians officially out of work in September,
or 8.3 per cent of the labor force, finding a job can still be a challenge. Take the case of Richard Furness, a former journalist, communications officer and small-town newspaper publisher. He’s 56, and his problem is his age. “The baby boomers are in the saddle and they tend to hire people who are younger than themselves,” Furness said recently while conducting computer searches of job opportunities at the Etobicoke Employment Resource Centre, another federally funded service for the jobless. But younger people who lack the right experience can also wind up out of work, or underemployed. “I’ve been looking for months and months and months,” said Rick Tyler, 36, a part-time cargo handler at Toronto international airport who has a certificate as a digital electronics technician. “I have a diploma, but I don’t have enough practical experience.”
For Canadians looking for work, the job market is not likely to improve much next year, according to even the most optimistic forecasts. Many economists predict the economy will grow by only 1.5 to 2.5 per cent in 1999, compared with almost three per cent this year. That kind of growth is likely to leave the unemployment rate either unchanged or slightly higher. But some observers caution that instability in world financial markets, which has been triggered partly by economic turmoil in Asia and Latin America, could send both the U.S. and Canadian economies into recession next year, drying up the supply of work even more. ‘We’re looking at a slowdown, no question about it,” says Derek Burleton, an economist with the Toronto Dominion Bank. “If we look at the risks facing the economy and
the job market, they are significant.”
Whatever uncertainties lie ahead, business and labor groups agree that those thrown out of work by a sputtering economy will be relying on a less generous social safety net to break their fall.
In 1997, a number of changes to the Employment Insurance program reduced payments and made it more difficult to qualify for benefits, particularly for repeat users. The impact is evident from a recent study by the federal human resources department, which runs the program. Last year, 574,000 people, or 42 per cent of the 1.36 million unemployed, received unemployment benefits. Throughout the 1980s, on the other hand, 67 to 83 per cent of the jobless were able to collect. Labor leaders like Canadian Auto Workers president
Buzz Hargrove vehemently oppose the government’s policy of running large surpluses in the El fund, expected to hit $20 billion in the fiscal year ending next March 31, at the same time that benefits are cut. “While the unemployed and their families struggle to survive, the federal government sits on a growing pile of cash originally meant to assist them,” Hargrove says. And Andrew Jackson, senior economist with the Ottawa-based Canadian Labour Congress, says the holes in the social safety net will allow even more people to fall through if a recession hits.
The fallout from an economic slowdown will hit some regions of the country harder than others, and there are signs this is already occurring. British Columbia is experiencing a mild recession and, while its unemployment rate has been hovering around the national average most of the year, Jock Finlayson, vice-president of policy with the Business Council of B.C., says that is largely because the
THE PROVINCIAL VIEW September, 1998, unemployment rates by province (seasonally adjusted)
JOBLESS IN THE’90s
Average annual rates of unemployment, for both sexes, and all ages 15 years and up. The 1998 rate is seasonally adjusted.
economy of the lower mainland has remained relatively strong. But Finlayson recently toured other parts of the province and found local unemployment rates running as high as 20 per cent. “Our economy has been hit harder than any other in Canada by the developments in Asia and the weakness in world commodity prices,” he says.
The picture is completely different in Alberta, Saskatchewan and Manitoba, where unemployment is below six per I cent—the lowest in the country—and I some local economies are close to overy heating. In Calgary, over 8,000 single I family homes will be completed this k year, outstripping growth in Metro § Toronto, says Richard Pauls, director of 8 research, analysis and planning with the city’s Economic Development Authority. Some companies, he notes, are reporting shortages of skilled workers in fields such as wireless technology and software engineering. The city may be better positioned to ride out a future recession because its economy is less reliant on the oil and gas industry than it has been. High-tech businesses now employ slightly over 30,000 people, surpassing by a narrow margin direct employment in the oilpatch, he says. “Calgary has been on a roll for three years now,” says Pauls. “We’ve had six-per-cent real growth two years in a row. Our concern is, how are we going to absorb all the new people?”
In Atlantic Canada, meanwhile, unemployment rates remain well above the national average, ranging from 10.5 per cent in Nova Scotia to 17.4 per cent in Newfoundland. But they have fallen across the region this year and are expected to drop marginally again in 1999. Some private sector forecasters predict that Newfoundland and Nova Scotia will lead the country in economic growth next year.
That may explain Peter O’Brien’s optimistic outlook. O’Brien, Atlantic vice-president of the Canadian Federation of Independent Business, says the regional economy is moving away from its traditional reliance on fishing, forestry and mining. It is gaining strength and diversity from Newfoundland’s offshore oil industry, Nova Scotia’s Sable Island natural gas pipeline project and the growth of high-tech companies. ‘We are achieving a level of stability that means recessions won’t be depressions like they were in the past,” he says. Even so, he and others concede that chronic high unemployment means many people have not benefited from rising economic fortunes.
Unemployment has traditionally been viewed through a regional prism, but experts say age has become increasingly important in determining how long someone remains out of work. Statistics Canada has found that unemployed people 45 and over have had greater difficulty throughout the 1990s finding work than younger persons. And unemployment can be emotionally and psychologically traumatic for an older person. “They’ve usually been with one or two employers for a long time, and their identity has been shaped by where they work,” says Lynda Rattenbury, who runs biweekly workshops at the Etobicoke Employment Resources Centre for people 45 and over.
Young people between 15 and 24 were among the big losers in the downturn of the early 1990s and they have not shared fully in the robust economic growth of the past three years. Between September, 1995, and September, 1998, the economy created almost 840,000 new jobs, pushing total employment to nearly 14.4 million. Yet youth unemployment rose from 15.6 per cent in 1995 to 16.7 per cent last year, although it has now fallen to 14.7 per cent, according to the latest fig1 ures from Statistics Canada. “Young people abandoned the labor mar1 ket after the 1990-1991 recession,” says Paul Darby, director of eco| nomic services with the Ottawa-based Conference Board of Canada. I “It was a real lost generation. Youth will once again get hurt badly in k another recession.” And the mere thought of next time may make § many people shudder, given the country’s persistently high unernst ployment rate and a tight, competitive job market. □
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