In pandemic times, the unemployment rate is not what it seems

Interpreting job market statistics demands a lot of care right now. The pandemic has muddied the statistical waters and created the illusion that unemployment rates are significantly higher in Canada than in other countries.

The leader of Canada’s official opposition claims the Canadian unemployment rate is higher than in other rich countries. Source:

Erin O’Toole, with a sense of indignation and urgency, has boldly proclaimed that “We lead the G7 in unemployment.”

Statistics in the service of partisan politics are often, to put it gently, rather elastic in their meaning, so it is natural to wonder: do we really lead the pack in the dubious distinction of having the highest rate of unemployment?

Statistics Canada reported Friday that the unemployment rate stands at 8.2 per cent, a full two percentage points above that of the United States. As opposition leader Mr. O’Toole points out by citing the Organization for Economic Cooperation and Development, that’s higher than in many other rich countries.

But more care is needed to uncover the true meaning of these numbers, because the pandemic has twisted the workings of the statistical machinery that in normal times serves us well.

Continue reading “In pandemic times, the unemployment rate is not what it seems”

The gap between US and Canadian unemployment rates is bigger than it appears

At 8.1% the unemployment rate in the United States is about one percentage point above the 7.2% currently reported for Canada, but this gap would be almost two percentage points if the Canadian rate was measured in the same way as the American.

This revealing picture from the recent Canadian federal government Budget paints a more accurate portrait by using unemployment rates defined in a similar way across the two countries.

Continue reading “The gap between US and Canadian unemployment rates is bigger than it appears”