What set this diatribe off for me? This morning as I got the call that there will be no work for me to do today. Well looking at my browser, I just happened to glance at this news story from CBC News that spewed Canada had a lowered its unemployment rate. It is a routine for me to turn on the computer, connect to the Internet, then scan the news site in my browser just after getting up from a hard night’s sleep. So I was happy for about one-one hundredth of a second with this joyous news of economic upwardness. “Ya-hoo” I thought to myself.
The news story touted that Canada produced over fifty-eight thousands jobs in the month of April, 2011. And then below that it stated that it pushed the unemployment rate to 7.6 percent. So, I bet you are wondering why I was only happy for a very short period of time, right?
OK, first, Canada has almost forty million people in it. I would venture to say that roughly three-quarters of us need income to either support ourselves, or to support our dependants. Most of the thirty million employed are, or have, worked last year. Some have lost their jobs, and are unemployment, while others just simply vanished from off of Statics Canada’s radar. So there is a sizable dark figure in this number alone that is very significant.
Second, We are dealing with rates, not a total number of employment vrs unemployment tallied up into a percentage. I know from having this discussion with my friends, “rates” are very misleading because not many of them have had advanced statistical training, or they simply have forgotten their high school math lessons. Rates are calculated as follows: The total number of employed, divided by the number of unemployed, multiplied by 1000 to give you the sum for your rate.
Sadly, there is one huge variable in this equation that does not satisfy me. How do you determine the number of unemployed?
My third problem. Statistic Canada has only has one real measure and that is the information it gathers from those who have filed for unemployment benefits. It does not, or cannot track those who are “off the radar.” In other words, there is probably a significant number of those who are simply not collecting it, or, for whatever other reason, do not qualify for it, and do not inform the various government agencies that they are unemployed. On the other side of the same coin, there are people who have more than one job, say two part-time jobs, and when they leave one employer, receive their separation papers, they continue to work for another, voiding out any claim(s) they have to the employment insurance benefits. When there are a huge migration of people from one area to another, or from one industry to another, there is an unknown dark figure when trying to account for the population.
And lastly, a drop of 0.1 percent in the unemployment rate is not something that I would run up and down the street celebrating about. In fact, for me, this does not generate any enthusiasm whatsoever because of the unknown variables and that dark figure that would essentially cancel out the variance.
There! I have probably spent more time typing this blog-post out than the time that it was worth reading this news story. Sure, it is nice to know that our employment rate has dropped, albeit a very modest drop, but I know for some, this feel-good story might be misleading for those who take this as the gospel of economics—it is not. The real hope is that this becomes a trend, a statistical regression that will keep on climbing until we reach utopia.