When Islanders go for their annual health checkup, if they are fortunate enough to have a physician, there are a number of routine checks that can be performed quickly to assess your overall health. Blood pressure, heart rate, blood work; each offer an assessment to the overall harmony of one’s health.
The economy has a number of quick checkpoints as well: stock indices, housing starts, retail sales, exports and job numbers. These are not comprehensive, but independently and collectively, can give a good sense for the overall health of an economy.
The rate of relative employment has garnered attention recently, and undoubtedly will be a soft spot for policy makers, economists, and employers over the coming several quarters.
The underlying issue is an economy in transformation and due to the structural nature of some of these changes, the transition may not be quick.
Like checking blood pressure, one can examine the employment numbers and have various interpretations depending on your perspective. More people are unemployed this month than last – that is bad news. Compare the data to some other timescale and interpretations can be positive or negative based on interpretation. Forecasting based on information we know can also have peril.
The economic impact becomes citizens who are not working, lack the flexibility employment affords. Unemployment benefits are a fraction of employment income and quickly those benefits run out. Without discretionary income, people don’t spend money on entertainment, meals or other purchases that can be deferred. A cycle of reduced spending tightens other sectors and consequent layoffs occur. This is where we are.
One structural challenge is a very rational reliance on the strength of our national resources; and many have commuted outside the province for gainful employment. If we observe what is happening with global demand for resources, general economic and security instability, and supply inventories of oil in particular; the wheels of prosperity are slowing and it takes some time for these to start churning again.
If you are one of the 72,000 people working, you are a shrinking number. If you are one of the 9,000 seeking employment and presently unable to find anything suitable, it is going to be challenging as we enter the Fall season. If you are one of the many not captured in the present statistics, exhausted by searching or employment insurance benefits have expired, this is more serious. These are the rarely discussed societal challenges that all citizens must be aware of and collectively seek remedy to.
Industry will not quickly resolve declining labour trends, and governments alone are not equipped to deal with the complexity of challenges evolving. Solutions will involve a greater collective of business, Island residents and the engaged and under-engaged workforce.