A note on Canadian unemployment since 1921
The recessions of the early 1980s and early 1990s resulted in high unemployment rates. Some people have compared these rates with those of the Great Depression of the 1930s. This note examines unemployment rate data for recent years and earlier in this century.
Since 1945, Canadian unemployment data have been generated by the Labour Force Survey (LFS).
Before that, however, no regular measure was taken. Using various methods, a variety of labour statistics have been estimated back to 1921.
The calculation procedures used for the pre-war data differ considerably from those used for the more recent data.
Therefore, the earlier numbers should be considered only an approximation of what would have resulted if the LFS had been conducted before the Second World War. It is encouraging to note, however, ...view middle of the document...
The event often called the Great Depression actually consisted of two cycles: the severe slump of the early 1930s and a lesser downturn in the late 1930s, with some recovery in between. The national unemployment rate in June 1933, at 19.3%, was the worst over the entire period since 1921. It was also about 8 percentage points higher than the highest post-World War II June rate, 11.5%, recorded 50 years later in 1983. The 1983 estimate was about the same as that of 1938 and 1939. In June 1992, the unemployment rate was slightly lower, at 10.8%. (Because of the procedures used to obtain pre-war unemployment data, all observations in this note refer to June.)
The lowest unemployment rates earlier in the century were much lower than anything experienced since the mid-1970s. From 1927 to 1929, and again during and after the Second World War, unemployment rates dropped to 3% or less, whereas the lowest June unemployment rates in the past 15 years never dropped much below 7%.
It might be argued that the low unemployment rates of the early 1940s and, to a lesser extent, the early 1950s (Korean War) were unnatural events caused by wartime mobilization, and as a result are not comparable to recent experience. However, rates were also very low in the late 1920s and late 1940s, when no such artificial stimulus existed.
Thus, fluctuations in unemployment were much greater a half-century ago than they are now. A large body of economic literature has been devoted to explaining this flattening. While the results have varied from study to study, many researchers have concluded that changes in public policy and the structure of the Canadian labour market have moderated swings in unemployment over economic cycles (Burns, pp. 45-51, in Gera, 1991).
As of January 2010 the LFS reported 43.000 part time jobs added into Canada bringing the average down by 0.1% to 8.3%. British Columbia has a unemployment rate of 8.1%. Saskatchewan has the lowest of 4.7% and Newfoundland and Labrador is at the highest in Canada at 14.9%.