Three questions to ask the Minister of Finance
“Jobs and Growth the Priorities as Minister Flaherty Hosts Pre-Budget Consultations”, screams the title of a press release from the Department of Finance issued about a month ago.
Jim Flaherty wants to hear from Canadians about how he can maintain the federal government’s “focus on jobs and economic growth while reducing the deficit.”
But this week is a particularly good time to first pose a few questions to him in the hope of clarifying some facts about jobs, unemployment, and the role of government policy.
On Friday Statistics Canada will release–as it does on the first Friday of every month–estimates of employment and unemployment for the previous month. The December numbers will complete the picture for 2011, and rather than just focus on the month-to-month change invite a medium term perspective.
The canned response by government officials to questions about these numbers is something along the lines of: “we are pleased that the Canadian economy has recovered all the jobs lost during the recession, and created hundreds of thousands new net jobs.”
This is certainly true, and it is certainly encouraged by the way Statistics Canada edits its press release: a graph like the following regularly appearing as the first piece of information.
But the overall employment level masks as much as it reveals, with important facts hidden in the details or not even presented.
So here are three questions that invite more than a canned response.
1. What is being done about the fact that youth employment is stuck at the same level as during the depth of the recession?
While it is true that employment has more than recovered from its mid 2009 trough, this is not the case for the young. The Statistics Canada numbers show that employment for 15 to 24 year olds fell sharply with the recession, and has not improved at all. There has been no recovery in the number of employed young people; all the job growth has gone to those 55 years of age and older.
Surely, the voices of the Occupy movement echo these job prospects. The Minister does not need to consult further to realize this, and also to appreciate that his macroeconomic policies, to the extent that they have played a role in boosting jobs, have not benefited youth.
Where is Canada’s jobs strategy for the young?
2. Given that the unemployment rate for immigrants is so much higher than the national average why did the government not cut immigration levels during the worst recession of the post war era?
While it is bad enough that Statistics Canada doesn’t highlight the youth employment numbers, it does not even bother to publish the numbers for immigrants. You have to ask for it.
The immigrant unemployment rate was well above the national average the last time I asked, and I suspect that employment has not improved much since the recovery began.
But the Minister of Finance surely knows the details, and he should be asked to what extent the government’s policy of maintaining elevated immigration levels during the recession exacerbated the problem.
Just what is the economic logic for increasing labour supply when demand is collapsing? What are the longer term consequences of this, both for the immigrants and for others?
3. Why are so few of the unemployed receiving Employment Insurance benefits?
At the onset of the recession the government made Employment Insurance benefits more generous, a decision that was important in supporting laid off workers. But this moment has passed, and besides only a small fraction of the unemployed receive benefits.
Statistics Canada knows the number of beneficiaries, but never presents it alongside the number of unemployed. It takes an extra effort to realize that there are 2 1/2 times more unemployed individuals than there are EI beneficiaries: last October 1.37 million Canadians were unemployed, but only 541,200 received benefits.
It’s reasonable to suspect that the young and new immigrants are even less likely to receive benefits as their shorter work histories keep them from qualifying. Jobs are not forthcoming; nor is financial support.
But the Minister of Finance should know the details and offer an explanation as to why so few unemployed receive benefits, and for which groups this is particularly so.
Is the implication that the government does not believe unemployment causes hardship for these groups? If not, what reforms will the government entertain to increase the responsiveness of Employment Insurance to the needs of all Canadians?
Perhaps someone can get answers to these questions. They might be a first step in a conversation about who has shouldered the burden of the recession, what public policy is going to do about it, and make the Minister’s online consultation a little more meaningful as he begins to ponder the trade-offs between jobs, income support, and deficit cutting.