Recall: Another economic goal of Canada is full employment Labour Force Survey Every month, Stats Canada keeps takes a monthly survey of households (labour force population) and keeps track of the workforce Labour Force: all people who either have a job or are actively seeking employment Participation Rate: the percentage of the entire labour force population that makes up the labour force 9.2 Unemployment
Unemployment Rate: number of unemployed people in the labour force as a percentage of the entire labour force In 2010, Canada’s labour force was million people million people employed & million not employed Thus, unemployment rate was 8.0% The Official Unemployment Rate
Unemployment rate calculation leaves room for error What about factors such as: Underemployment Workers being underutilized, either as part-time workers, or by working at jobs not appropriate to their skills or education Discouraged workers Unemployed workers who have given up looking for work Dishonesty People responding to a Stats Can survey may report they are actively looking for work when in fact they are not Drawbacks of the Official Unemployment Rate
Frictional Unemployment: unemployment due to being temporarily between jobs or looking for a first job Structural Unemployment: unemployment due to a mismatch between people and jobs Cyclical Unemployment: unemployment due to fluctuations in output and spending Seasonal Unemployment: unemployment due to the seasonal nature of some occupations and industries Types of Unemployment
Full Employment is the highest reasonable expectation of employment for the economy as a whole Defined in terms of a natural unemployment rate Unemployment Insurance: assistance received during periods of unemployment (after having worked) Minimum Wages: minimum wage has increased a great deal in the past few decades Stats Canada found: a 10% increase in minimum wage reduced the unemployment rate of male teens by 1% and 2.7% for female teens Full Employment