Actual Lack of Employment Versus Officially Recognized Unemployment
Statistics Canada defines its Labour Force Survey as "a
monthly survey which measures the current state of the Canadian labour
market and is used, among other things, to calculate the national,
provincial, territorial and regional employment and unemployment rates.
The survey results are used to make important decisions regarding job
creation, education and training, retirement pensions and income
support. At this time, as Canadians continue to deal with the COVID-19
pandemic, it is more important than ever to have an accurate picture of
the job situation, the cost of living, and the economy. Data will be
used to guide government decisions and assist Canadians through these
states: "The concepts of employment and unemployment are derived from
the theory of the supply of labour as a factor of production. The
production referred to is in turn defined as those goods and services
included in the System of National Accounts."
the logical and precise unit of measurement of total labour supply is
person-hours, the conceptual terms of reference for the survey require
that individual members of the population be classified as employed,
unemployed, or not in the labour force. Accordingly, persons who are
supplying services in the reference period, regardless of the quantity
supplied, are classified as employed while those who provide evidence
that they are offering their labour services to the market (again
regardless of quantity) are classified as unemployed. The remainder of
the population, those neither currently supplying nor offering their
labour services, are referred to as persons not in the labour force.
"The definition of unemployment is therefore the following:
"Unemployed persons are those who, during reference
- were on temporary layoff during
the reference week with an expectation of recall and were available for
- were without work, had looked
for work in the past four weeks, and were available for work, or
- had a new job to start within four weeks from reference
week, and were available for work."
those who are without a job but are not considered to be offering their
labour services to the market are not classified as unemployed and
therefore are not classified as being a part of the labour force either.
Based on those definitions, Statistics Canada reaches these
figures for January 2021 (in thousands, except for rates):
Canada' s population: 31,191.2
Labour force: 20,171.0
Full-time employment: 15,132.3
Part-time employment: 3,139.7
Participation rate: 64.7 per cent
Unemployment rate: 9.4 per cent
Employment rate: 58.6 per cent
For reference, in April 2020, when the country was under
severe lockdowns because of the COVID-19 pandemic, the figures were:
Labour force: 18,603.2
Full-time employment: 13,662.8
Part-time employment: 2,522.0
Participation rate: 59.8 per cent
Unemployment rate: 13.0 per cent
Employment rate: 52.1 per
For January 2021, Statistics Canada makes
observations from the figures among which are the following:
Employment fell to lowest level since August.
Employment fell by 213,000 (-1.2%) in January. Losses were entirely in
part-time work and were concentrated in the Quebec and Ontario retail
- The decline in January followed a
53,000 drop (-0.3%) in December and brought employment to its lowest
level since August 2020.
- Compared with February
2020, employment was down 858,000 in January and COVID-related absences
from work were up 529,000.
- The unemployment rate
rose 0.6 percentage points to 9.4 per cent, the highest rate since
- The number of long-term unemployed
(people who have been looking for work or who have been on temporary
layoff for 27 weeks or more) remained at a record high (512,000).
- Employment declined in January in three services-producing
industries most affected by new and continuing public health
restrictions -- accommodation and food services (-8.2%), retail trade
(-7.4%), and information, culture and recreation (-2.4%).
Employment in construction rose by 39,000, manufacturing lost 12,000
jobs, while, as a whole, the goods-producing sector gained 23,000 jobs.
- Employment among youth aged 15 to 24 declined by 108,000
(-4.6%) in January, falling to its lowest level since August 2020.
Employment for female youth fell by 69,000 (-6.1%) and was farther
(-17.4%) from its pre-COVID-19 February 2020 level than any other major
demographic group. Male youth employment fell by 39,000 (-3.3%) and was
11.6 per cent lower than it was in February 2020.
Canada attributes the overall loss of employment to extended public
health measures taken by a number of provinces in December 2020 in
response to increasing COVID-19 cases.
statistics indicate definite trends, they do not accurately indicate
the number of people who are unemployed, or the unemployment rate,
because according to the criteria quoted above, actually offering one's
services to the labour market determines if one is considered
It has been known for a long time that
all those workers who find themselves without a job and are not
actively looking for one (offering their services to the labour market)
during the time the labour survey is done are not considered unemployed
or part of the labour force. This means that at all times, even at the
best of times in terms of the performance of the labour market, the
actual rate of unemployment is much higher than the official rate.
Aside from this, the full extent of the large increase in
unemployment because of massive layoffs during the pandemic is far from
being reflected in the unemployment figures.
April 2020, with the massive surge of unemployment due to severe
COVID-19 lockdowns across the country, Statistics Canada wrote:
"Large increase in unemployment
unemployment rate rose 5.2 percentage points in April to 13.0 per cent.
This followed an increase of 2.2 percentage points in March. Over the
period since comparable data became available in 1976, the April
unemployment rate was second only to the 13.1 per cent observed in
"The April unemployment
rate would be 17.8 per cent, when adjusted to reflect those who were
not counted as unemployed for reasons specific to the COVID-19 economic
shutdown. During the week of April 12, 1.1 million people
were not in the labour force but had worked recently (in March or
April) and wanted to work. They were not counted as
unemployed but were counted as not in the labour force because they did
not look for work, presumably due to ongoing business closures and very
limited opportunities to find new work." (Emphasis
The assessment of a rate of
unemployment of 9.4 per cent in January 2021 is clearly far below the
actual rate. If one uses the same methodology, using the discrepancy
that was recognized by Statistics Canada in April 2020, the January
rate would be around 12.8 per cent. That is without counting all those
workers who, during the period in which the survey was done, did not
actually look for work for reasons other than COVID-19.
of the aims of the assessment of unemployment based on participation in
the labour market has been to ensure that Employment Insurance
(formerly Unemployment Insurance) is not a social program that protects
all those who find themselves unemployed in an economic system in which
everything is subordinated to narrow private interests. A lower
official rate of unemployment means that workers have to work more
hours before becoming eligible and the duration of their benefits is
shorter. This along with all the other criteria for eligibility adopted
over the years which have led to a situation in which it is assessed
that only about 40 per cent of the unemployed receive EI benefits. An
exception made by the federal government since the end of September
2020, which will last until September 11 this year, assumes a minimum
unemployment rate of 13.1 per cent is being applied in all EI economic
regions across Canada. This was not done to provide justice to the
unemployed but to maintain a certain amount of money in circulation in
the economy so as to prevent further economic collapse.
remains a plague inherent in the man-eating capitalist system which is
made worse by the neo-liberal nation-wrecking agenda of the ruling
elite. It shows the necessity for a new direction for the economy, a
pro-social direction aimed at upholding the well-being and the rights
of all, under the control of the people themselves.
This article was published in
Volume 51 Number 2 - February 7, 2021
Actual Lack of Employment Versus Officially Recognized Unemployment