Go to the Globe and Mail homepage

Jump to main navigationJump to main content

AdChoices
Rick Newton is an out of work IT specialist who has gone back to school to get his IT certificate updated. He doesn't count in the newest EI statistics because his claims ran out, plus he doesn't count on the labour force survey as unemployed because he's stopped looking for work. (Sheryl Nadler)
Rick Newton is an out of work IT specialist who has gone back to school to get his IT certificate updated. He doesn't count in the newest EI statistics because his claims ran out, plus he doesn't count on the labour force survey as unemployed because he's stopped looking for work. (Sheryl Nadler)

Labour

There's jobless, and officially jobless Add to ...

After John Peck was reorganized out of his job at Shell Canada Ltd. in April, he searched for work in communications or consulting for a few months. But few positions were open and the rare ones posted were swamped with applicants.

So, he has stopped looking. The 56-year-old, who received a severance package, is spending a month on Deer Island, N.B., where he's diving, sailing boats and combing beaches.

"It's a good time to wait and see what's happening with the economy, see how things shake out," he explains. "There's a lot more competition right now, and that was part of my decision to take a good chunk of the summer off."

When Statistics Canada reports its monthly job count today, many unemployed people like Mr. Peck - who have either postponed or given up their job search - won't be tallied. That's because people who haven't hunted for jobs in the past month aren't counted as unemployed or as part of the labour force.

The gap between the actual unemployment rate and the official statistics is likely to widen in the coming months, as more people give up their job search to go back to school, or wait until jobs are more abundant, economists say. Many more workers will settle for part-time jobs, even though they want full-time positions.

"Official numbers always understate how bad it is during recessionary periods," said Robert Fairholm, an economist at the Centre for Spatial Economics, a research firm in Milton, Ont. "Things will get worse before they get better for unemployed people."

In a forecast this week, he predicted that Canada's unemployment rate would rise to 10.5 per cent by the first quarter of 2011 if discouraged workers were counted.

Today's Statscan report is expected to show about 15,000 jobs were lost last month, sending the national unemployment rate to 8.8 per cent from 8.6 per cent, according to economists polled by Bloomberg. The economy shed almost half a million full-time jobs - 454,000 positions - between October and June, Statscan figures show.

When involuntary part-time workers are factored into the equation, Canada's unemployment rate would have been 11.3 per cent in June, according to Statscan's so-called R8 series on "underutilized" labour, which is not seasonally adjusted. That's well above the 8.1-per-cent level it showed in the same month last year, though down from the 12.4 per cent it reached in March.

Canada's official unemployment rate is a more accurate depiction of reality than the U.S. measure, though, because it includes people who are both actively and passively looking for work, said Millan Mulraine, economics strategist at TD Securities. The U.S. criteria are more stringent - they stipulate that people have to be actively looking for work - and thus fewer people are counted in the jobless tally, he said.

Employment insurance is another indicator of joblessness; the most recent report showed a record number of Canadians are receiving jobless benefits. That, too, could be skewed in the months ahead as EI benefits run out.

Rick Newton, 46, is one of thousands of Canadians who have fallen out of the country's official bookkeeping. EI benefits for the information-technology specialist dried up last year. So the Burlington, Ont., resident put his job search on hold to go back to school to update his certifications.

He said it was a "conscious decision" to leave the labour market after a fruitless job search.

"I hope to be looking for work again in November."

****

A numbers game

Employment insurance is one indicator of joblessness. But that data could be skewed in coming months as EI benefits run out.

Number of people receiving regular Employment Insurance benefits

May 2009: 778,700

Unemployment rate, 8.6%

THE GLOBE AND MAIL 66 SOURCE: STATISTICS CANADA

Report Typo/Error

Follow on Twitter: @taviagrant

 

More Related to this Story

Next story

loading

Trending

loading

Most popular videos »

More from The Globe and Mail

Most popular