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William Jones takes a break during his volunteer kitchen shift at the Calgary Mustard Seed (Chris Bolin/© 2008)
William Jones takes a break during his volunteer kitchen shift at the Calgary Mustard Seed (Chris Bolin/© 2008)

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The perils of a jobless recovery Add to ...

Without warning last fall, Abdul Simard was called to a meeting at a restaurant across the street from the factory where he worked. After 26 years on the job, he was being let go.

His plant, located in the industrial heartland of Ontario just northwest of Toronto, manufactured steel pipes. But in a matter of weeks, the entire operation would be shuttered by the company's U.S. head office.

When he'd stepped off the plane from Guyana in 1982, with the Canadian economy in the grip of one of the worst postwar recessions on record, Mr. Simard still found work almost immediately.

Now, for the first time since that day, the 49-year-old forklift operator was unemployed.

But the situation would get worse. Soon after, his wife and his daughter were both laid off, also from factory jobs. None of them have so far had any luck finding work.

"It is a house full of unemployed people," Mr. Simard says.

For someone who considers himself a hard-working man, this is unsettling.

But more disturbing - to economists, politicians and the throngs of desperate job hunters across the country - is the likelihood that it will be a long time before people like Mr. Simard can find similar-paying work again, assuming they ever can.

The recession may be all but over, and policy makers around the world are starting to take tentative steps toward unwinding the extraordinary stimulus measures taken over the past year.

But while major economies may be starting to grow again, for job hunters like Mr. Simard the end of the recession is little more than a headline.

More than in previous recessions, there has been a wholesale shift of workers from full-time jobs to part-time positions, as laid-off employees take whatever work they can get to make ends meet.

It's the lingering hangover of the downturn. For all the talk of green shoots, the return to economic growth will probably bring with it only a trickle of new jobs in Canada and the U.S. So far, all indications point to a "jobless recovery," a phrase that has been virtually absent from the economic lexicon since the mid-1990s, but has now returned with an unwelcome vengeance.

It's no surprise that the Canadian unemployment rate, which has risen to 8.7 per cent from 6.1 per cent a year ago, will shoot higher. Unemployment is a lagging indicator and typically continues rising for months after the economy has stopped contracting.

At some point next year, the Organization for Economic Co-operation and Development expects the jobless figure to hit double digits in Canada. The recession of the 1990s led to an unemployment rate as high as 12.1 per cent by late 1992.

Based on that one measure, it appears that this recession could have been a lot worse. But the trouble, economists say, is that the 8.7-per-cent unemployment figure may be hiding as much as it reveals. Beneath that figure lurks a deeper shift in the country's job market wrought by the recession - and it's a change that poses long-term risks to the economy and its workers.

Unemployed Canadians are now finding themselves out of work for longer periods of time. In Canada, the average length of unemployment has risen over the past year to 17.6 weeks from 15.3 weeks. That may seem like a small change, but it amounts to a full paycheque, and potentially billions to the economy if those people were able to find work.

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