[Bruce_the_vii]

Thanks for the detailed posts. I've never had someone look into my data like that before. These studies on hidden unemployment are exactly what I'm concerned with.

I don't trust your opinion of these studies though. You say their methodology and data are rigorous. In fact Economics is a Social Science and has nothing to do with the rigors of physical science. Economists simply don't have the data. They have polls of people's opinion and isolated statistics which they treat with rigor - it's sort of a facade of empiricism.

My adult participation rate differs with the labour survey's in that they ask the hidden unemployed "might they like a job" in a telephone survey. The telephone survey is not the end all. I look at what people actually do in a good economy. They go back to work. So actually there's a difference between what they say and what they do.

[Bruce_the_vii]

Here's the statistics on Foreign Immigration to Toronto in the 1990s. You can make out from this huge oversight that there is no economist in Canada that pays any attention to the labour market data. They simply didn't know and to this day the inappropriateness of immigration is not reported.


The Greater Toronto Area took 6 years and 5 months to recovery its jobs total after the 1990/91 recession, until Nov. 1996. In that time some 558,579 new foreign immigrants arrived in the city. That is half-a-million immigrants before a single new job was created. Here are the Statistics Canada tables:


…………Statistics Canada labour force survey
………………for GTA (Toronto CMA)
……………..average annual employment


year GTA employment in 1000s
2007 2865
2006 2802
2005 2763
2004 2707
2003 2648
2002 2590
2001 2537
2000 2455
1999 2354
1998 2290
1997 2223
1996 2127
1995 2089
1994 1994
1993 1996
1992 1996
1991 2024
1990 2135


Peak employment in 1980’s business cycle
Jun-90 2184.08


Recovery point to that peak in GTA
Nov-96 2183.97


………………..Table 282-0090




Statistics Canada table 051-0039
..Immigration to Toronto area

1986/1987 43,256
1987/1988 56,120
1988/1989 66,671
1989/1990 72,228
1990/1991 79,047
1991/1992 86,872
1992/1993 98,762
1993/1994 83,762
1994/1995 86,997
1995/1996 84,670
1996/1997 92,316
1997/1998 82,285
1998/1999 70,804
1999/2000 88,256
2000/2001 117,602
2001/2002 123,836
2002/2003 87,495
2003/2004 102,536
2004/2005 103,948
2005/2006 109,349
2006/2007 93,341

[Bruce_the_vii]

In full employment pre-recession Calgary some 5.2% of workers earned less than $11 an hour. The legislated minimum wage for adults there should be that $11. This would give some 5.2% of workers a $1 benefit. Minimum wage has always been set low, is really only a fence for the worst off workers from being ran over rough shod by the worst employers. It's always been very minimal because it is thought of a jobs killer. In Alberta pre-recession they raised the minimum wage to $8:55 or something but even that was dissed. At full employment you are really looking at $11 as a low fence.

Minimum wage is thought of as a jobs killer but at full employment the problem is labour shortages. This is filled with immigrants. So here in Canada they worry about minimum wage being a jobs killer all the while filling labour shortages with immigrants.

An aggressive minimum wage, higher than $11, is a horse of a different colour. It's a macro-economic device. An aggressive minimum wage would reduce, downsize, the low wage sector by supply and demand. You would do without low wage businesses and the goods and services they provide. It would make economic growth at the bottom more difficult, causing growth cities to grow slower which in fact is desirable. This all would skew the jobs available and the growth in jobs to a higher average wage. It would have the social benefit of dealing with exploitive wages. This is all practical at full employment, or approaching full employment as in Alberta. An aggressive minimum wage is an unsung macro economic tool. A finese variation on this would be to legislate a different minimum wage for each city. Alberta might properly make the legislated minimum wage $12 or $13 an hour to produce a sounder industrial base. The wages in Calgary inflated pre-recession and an minimum wage of $13 there would not be that aggressive.

I call myself a jobs activist and work from Toronto here. I actually have recognition of this idea of minimum wage being a macro economic tool in Parliament. Half the Parliamentarians are astute enough to catch the idea while the other half are sort of lack luster. The actual leaders in Parliament today are all full steam ahead with maximum growth. However, people don't like today's leaders and their bad eocnomics is one good reason.

[Khar]

Quote:

Thanks for the detailed posts. I've never had someone look into my data like that before. These studies on hidden unemployment are exactly what I'm concerned with.

I don't trust your opinion of these studies though. You say their methodology and data are rigorous. In fact Economics is a Social Science and has nothing to do with the rigors of physical science. Economists simply don't have the data. They have polls of people's opinion and isolated statistics which they treat with rigor - it's sort of a facade of empiricism.

My adult participation rate differs with the labour survey's in that they ask the hidden unemployed "might they like a job" in a telephone survey. The telephone survey is not the end all. I look at what people actually do in a good economy. They go back to work. So actually there's a difference between what they say and what they do.

I did not call it rigorous. I said they were “thorough,” “proper” and “jurored.” This means that the methodology within has passed a level of expectation above and beyond what you have presented here. Whether or not you wish to call that rigorous is up to you, as I tried to limit my overall opinion of the articles until you read them.

However, do keep in mind that they are using very large data sources in comparison to what you are using, from what I understand. However, dismissing them because you consider them a “social problem” altogether is not wise, in my opinion. Why would you not wish to see what others have done with credentials in the field, using census and government information? Would you not prefer to see how they calculate and draw their conclusions?

You are making a lot of assumptions that in some vague way your work is superior, but you cannot define how without dismissing all the relevant work I just provided in one fell swoop as “telephone survey[s]” or a “facade of empiricism.” This does not make sense to me.

[Bruce_the_vii]

Well I don't have the time to read and critiqe all these reports actually. There are a number of calculations of hidden unemployment that I've seen before. They are all proper and joured as you call it but don't address my observation: what people say they will do and what they actually do are not the same. My observation that many cities are above what is considered full employment indicates this. One issue is people doing other things, going for additional schooling for example, will not say they are unemployed but in a good economy they will head back to work. Finally I say I don't know but the thing to do is to test the waters by more appropriate immigration. Any way these studies that indicate hidden unemployer are allies, indicate the official technical defintion is not good enought to steer the nation by. Thanks for looking into this.

[ASLplease]

Bruce, McDonalds is hiring again!

[Bruce_the_vii]

Unemployment statistics.

I’ve post my complaint with the official unemployment statistic too many times before but I found the City of Toronto data is nice and graphic.

The official unemployment statistic is entirely unreliable because people drop out of the labour force if good jobs with a reasonable level of convenience are not available. In the deep recession of the 1990’s the City of Toronto labour force lost 11.15% of workers to this in four years and a month. The figure clearly shows how volatile the labour force is – some 11.15% of the work force found alternate means of support such that they could do other things. That is there was an additional 11.15% hidden unemployed on top of the official unemployment.

The official unemployment in Canada currently is 8% or so. This is entirely unreliable as labour markets are so soft everywhere and were pre-recession so there will be “hidden unemployment”.

The 11.15% figure comes from a custom run on Statistics Canada labour force survey data that the City of Toronto keeps. At the peak in March 1990 the labour force was 69.6% of adults while four years latter in Feb. 1994 it was 61.84%. The arithmetic is the 11.15%.

[BeaverFever]

The thing is, there always people who COULD WORK but chose not to - stay at home parents, ppl who go back to school, the wealthy, various types of internet entreprenneurs and entertainers, etc?

[Bruce_the_vii]

The number of working age people in the labour force at the peak posted above was 69.6% = the other 30.4% were, as you say, not interested in working mainly. That's normal. The shift of 11.15% was in people who were actually in the labour force but dropped out when jobs became too hard to find or too inconvenient. These people "might like a job" and are potential workers - there's a difference in the two groups, the 30.4% and the 11.15%.

The question becomes how far off is Statistics Canada Official Unemployment figure normally, say today where nationally it's about 8%. Unemployment is distressful to families and politically volatile so it's an important question.

[ASLplease]

Bruce_the_vii wrote:

The number of working age people in the labour force at the peak posted above was 69.6% = the other 30.4% were, as you say, not interested in working mainly. That's normal. The shift of 11.15% was in people who were actually in the labour force but dropped out when jobs became too hard to find or too inconvenient. These people "might like a job" and are potential workers - there's a difference in the two groups, the 30.4% and the 11.15%.

The question becomes how far off is Statistics Canada Official Unemployment figure normally, say today where nationally it's about 8%. Unemployment is distressful to families and politically volatile so it's an important question.

thanks for the academic rant that probably has no practical relevance...

so, if i'm unemployed, i must have to compete with 30.4%? I don't think so!

i hope you can acknowledge that the EI numbers might be more representative of what i would be facing than your numbers.

[Bruce_the_vii]

No, no - the 11.15% has relevance. It tells you what the real unemployment is - wage inflation and potential economic growth depend on this number. The unemployment is politically volatile as well.

The 30% do not want a job, are retired and so forth. So no the unemployed don't compete with them.

However I see your point, for someone in need of a job the EI numbers are more relevant. These people will be the active competition.

The people that drop out are actually a shock absorber for society in economic downturns, like the social programs.

[ASLplease]

I dont see how redefining the unemployment numbers would make any analysis more acurate. Afterall, where does most of the analysis come from? I think it comes from trending the data over time.

So how does the 'not looking for work' demographic improve our ability to extract acurate information from the trending? I dont see how it can since this demographic is more detached from the issue that concern us, than those that are product members of the economy(and those that want to be)

What are your motives for pointing out 'the real unemployment'? is it to improve the acuracy of trending analysis? is it to show how much you know on the topic? maybe you would like to see the numbers jump overnight to the higher number, in a belief that the public shock value would serve your political ideals well?

any of these? all of these? none of the above? what is it?


btw, dont take 'what is it' as a question to hide from. Its a pretty wide open question, pls take the oportunity to give us your most forward and thoughtful answer. Heck, please add your best sales pitch too.

[Bruce_the_vii]

Thank you for asking. The point is the government will target immigration at Statistics Canada’s official unemployment. This will produce a flood of immigrants that will in turn keep the labour force level low. The experience of Alberta and other places with robust economy suggests the hidden unemployed will head back to work as soon as economic conditions improve. So all you have to do in the main cities is get immigration right. I estimate that there is substantial hidden unemployment across Canada at this time (I make a reference point of Alberta and other places with strong economies and extrapolate the hidden unemployment for Canada from these best performers.)

You could get higher family income, more taxes for the government and a sounder economy from having more people working.

The government wants to swamp the country with immigrants and keep the hidden unemployment at maybe 6% and thus the real unemployment at maybe 13%.

The USA has worse numbers than Canada. They have higher unemployment, more hidden unemployment and are not aging as fast. I pencil in that the federal and state taxes revenues down there could go up $250 to $300 billion dollars a year if they came to full employment in ten years. That is an increase in revenues without an increase in costs from additional people. That’s an advertisement.

I sent the statistic on hidden unemployment I posted above to the Liberal Immigration critic – who is now Justine Trudeau. I said it had economic, political and immigration implications. He sent me a polite response but did add “It is my sincere hope that the elimination of hidden unemployment resides in the near future”. He did get the idea.

[ASLplease]

If I read this correctly, you feel that the surplus of low income labour negatively affects productivity and profitability of our markets?

or, you feel a shortage of low income labour will cause our industries to boom, and markets to expand and grow exponentially?

[Bruce_the_vii]

ASLplease wrote:

If I read this correctly, you feel that the surplus of low income labour negatively affects productivity and profitability of our markets?

Yes. At the bottom in all of Canada there is over investment. There are too many fast food outlets that aren't busy. Restaurants and retail as well. The employees are not always busy and they make unproductive use of capital and taxes as well. They exist because labour is cheap and an enabler of their existence. If labour prices increased there would be megers and aquisitions, rationalization, just as there is with major comporations to gain efficiencies.

ASLplease wrote:

or, you feel a shortage of low income labour will cause our industries to boom, and markets to expand and grow exponentially?

No. There will be good growth in our economy as there always has been (if the world recovers from the recession). Business has always been growing in Canada and I just point out the fact. However there's a point. If there's growth people change jobs and the low wage businesses will run into labour shortages - as the people that escape from them can't be replaced. The worst will go out of business. This actually skews the businesses left to a higher average Value Added. Japan developed like this. It's a rephrasing of the idea above. Instead of growing good jobs you can also cut the bottom.


Thanks for asking though. I know you don’t share my concern with low wage jobs but it’s an area that can be improved and deserves attention. When I was younger I used to think about engineering improvements, R & D, now I think about improvements in economics instead. Same thing though, per capita income. I do have public support for these ideas - they do make sense