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Labour Force Survey December 1998 — Playing with Numbers

StatCan informs us today of their update to the labour force survey.

My comments are inserted between the lines of the excerpts shown below.  

           Subject:     The Daily for: 1999-01-08
               Date:     Fri, 8 Jan 1999 08:51:05 -0500
              From:     Jackie Godfrey <godfrey@statcan.ca>

**      What's in today's DAILY     **

PDF downloadable file for Netscape Mail users: http://www.statcan.ca/Daily/English/990108/d990108.pdf

99 01 08 08 30
Friday, January 8, 1999 For release at 8:30 a.m.

      Labour Force Survey,
Labour Force Survey
December 1998  

In December, overall labour market conditions were little changed as employment edged up slightly (+24,000) and the unemployment rate remained at 8.0%. Robust job growth, especially over the second half of 1998, brought gains for the year to an estimated 449,000 (+3.2%).

My Note: These figures don't jive with what StatCan states farther down in the release, but there is no possible way by which I can figure out which set of figures is the correct one.

Employment growth in 1998 represents the best annual performance of the decade. Gains in 1998 were both full (+2.7%) and part time (+5.3%).

    The strong job market attracted more people to the labour force in 1998. As a result, the participation rate rose 0.8 percentage points to 65.6%, the first significant annual increase this decade. The employment rate jumped to 60.4% (+1.2 percentage points) by the end of the year, the highest since 1991 and the unemployment rate fell to a nine year low of 8.0% (-0.6 percentage points).

Farther down in the release an employment rate of 60.4% is quoted.  Let's convert this to actual numbers and see what we've got.
     In 1998, 449,000 new jobs were created for an increase of 3.2%,  however, that seems to represent a combination of growth in full and part time jobs.  You must realize that anyone working even for only 1 hour in a given week, even if that was the only hour he worked in the whole year, is counted as part time employee.
     That means that 449,000/3.2 x 100 =  14,031,250 Canadians worked in 1998 (out of a total employable population of  14,031,250/60.4 x 100 =  23,230,546), either full or part time, but it doesn't tell us a thing about how many man/hours they put in in total or on average.
     The release tells us the employment rate was 60.4% of employable Canadians and that 65.6% of employable Canadians decided to be "attracted" to the job market.  You see, the way this works in Canada is that participation in the job market is entirely voluntary.  Nobody "needs" to work for a living in Canada!  To work or not to work is based on the decisions by Canadians on whether they'll grant employers the privilege of working for them and no other reason.  Hmmm.....  That of course means that the working population had to support all of the employable people who never worked at all during 1998, all   9,199,296 of them.  Let's hope that all of the people who worked between 1 or more hours during anyone week in 1998 earned enough of an income to support themselves, their families, and to have something left over to support those who didn't work at all. At any rate, whether 9.2 million is the true number of the unemployed or not, there were only 14 million Canadians in 1998 who earned some money through their work, full-time or not, that had to be used to support all 33 million of us.
     An interesting aspect of these numbers is that although we had 39.6% or  9,199,296 of employable Canadians during 1998 who decided not to be "attracted" to the job market, StatCan has decided that the number of people who were unemployed is only 8%.  Some people assume that the number of the officially unemployed announced by StatCan is so low because that number reflects only those people who are entitled to receive Employment Insurance benefits (only a small fraction of truly unemployed people are entitled to receive those benefits), but StatCan insist that this assumption is wrong -- search me, I can't figure out why.  The page is at containing those comments is at http://www.statcan.ca/english/concepts/cib.htm.  The following is a quote from that page (by Mike Sheridan, Director General, Labour and Household Surveys Branch, Statistics Canada)).  See if you can figure it out why StatCan assumes that someone who isn't working isn't unemployed.

"Although it is true that about 200,000 young people are neither employed, nor attending school, nor looking for work, it is unreasonable to assume that all (or even most of them) are, in fact, unemployed."

However if that doesn't make it clear enough for you yet, don't become upset.  According to what Mike Sheridan tells us in the following quote from the same source, this state of obfuscation is standard operational procedure for all G-7 countries:

    "It is worth noting that Statistics Canada’s definition and measure of unemployment is used by all G-7 countries and complies with the standards set by the International Labour Organization. It is unlikely that all these countries would have sanctioned a set of concepts and surveys that miss hundreds of thousands of young unemployed people."

Unlikely?  Maybe, but definitely possible!  After all, they all share the same interest in keeping the truth from the people.  It is not that I want to accuse anyone of deliberately lying, but it is the truth that there is absolutely nothing in the employment stats presented to us that would make it even possible to accuse anyone of lying with Canadian employment statistics.  It is left up anyone's imagination why it is that all G-7 countries have chosen to present employment information in such a manner that it is impossible to determine in concrete terms what the employment trends are, and why someone who isn't "attracted" to the job market is not considered to be unemployed although he is clearly not working.

It may be worth-while to show here StatCan's definitions of the Canadian labour force so that their interpretations become a little clearer, if that is possible at all.

[from http://www.statcan.ca/Daily/English/980317/d980317.htm]

Total paid labour force: composed of all people aged 15 years and over, excluding institutional residents, who were employed or unemployed during the week prior to Census day (the reference week).

[My Note: That makes it a little bit clearer, doesn't it?  Anyone who gets paid is working and anyone who doesn't isn't working.  Not so fast...  Aren't people who receive EI benefits getting paid?  And what about the "unpaid workers" mentioned in the last paragraph mentioned at the end of this quote? —WHS]

Reference year: the year preceding the year in which the census is held, in this case 1995 for the 1996 Census.

Full-time workers: those persons who said they worked mostly 30 hours or more a week during the census reference year.

[My Note: It's hard to understand why someone who didn't work every week of the year in full-time employment is counted as full-time employee, isn't it?  We don't have a 30hour standard work-week.   How many people working only 30 hours or less than 40/week consider themselves fully employed?  Most people like that whomI know consider that they got a 25% cut in income and having been put on short working hours, therefore they consider themselves only part-time workers. --WHS]

Part-time workers: those persons who said they worked mostly less than 30 hours a week during the census reference year.

[My Note: Aha, that clears it up!  It must be that those people who had full time work for 26 or more weeks during the year are considered full-time employees, and those who worked full-time for less than 26 weeks during the week in full-time jobs are considered to have been employed only part time.  It doesn't make much sense, but it does make all of us feel good, doesn't it?  Mind you, I would feel much better if StatCan were to tell us who worked a full 1872 hours a year (or whatever reasonable number) and who didn't.  It's a bit useless otherwise to categorize employees into full time and part time.  However, if we were to establish an absolute standard of full-time employment in terms of an absolute number of hours worked and were to measure everyone against that standard, we would find out in absolute terms what the extent of employment was, e.g.: we would be able to come up with a measure of the extent of average number of hours worked by employable Canadians, both in absolute terms and in terms of a percentage.  That would make it so clear that we would be able to understand and recognize the truth.  That would never do, because we probably wouldn't be able to stand it.  It may be that in this case the truth doesn't set us free but that rather it will scare us to death.--WHS]

Full-year, full-time workers: those persons who said they worked 49 to 52 weeks, on a full-time basis in the census reference year.

Full-year, part-time workers: those persons who said they worked 49 to 52 weeks, on a part-time basis in the census reference year.

The self-employed: can be divided into groups: "employers" who have their own paid help and "own account" workers who work by, and for, themselves. In addition, these groups can be further subdivided based on whether the self-employed business has been legally incorporated. The remaining members of the labour force are classified as "employees", persons who work for others or "unpaid family workers", persons who worked without pay in family farms or businesses.
==<end quote>==

The question is, which of these definitions were used in creatively constructing the information contained in today's "Daily"?  Some of them?  All of them?  How were these definitions categorized into full-time employment, part-time employment and unemployment?  Does anyone think that they can come up with reasonable answers?  Good luck!  However, if anyone does, let's hope that they don't hesitate to let others know.   It may even be worth the effort to let StatCan know as well, to clear up their confusion a bit.

I think that I'll stick with my own beliefs that were instilled in me by the Canadian Council of Bishops (who put the rate of the unemployed at more than 30%) and by the good people of the Fraser Institute who estimate that the true rate of the unemployed may be closer to around 25%.  It would be nice if our beliefs could be changed to knowing the absolute truth, but that, it seems to me, will be a long time coming from StatCan. [It would also be more in line with the official unemployment figures for all of Germany, which are presently — in 2000 — in the order of 26 percent. — WHS, 2001 02 10]

It doesn't seem worth it to analyze or interpret the rest of the information in today's "Daily", after all, "garbage in, garbage out." However, it may be interesting to note that StatCan states that the employment picture for women has improved considerably more than that for men.  At first glance, it appears that Canadian Affirmative Action hiring quotas are in all likelihood responsible for that, but on second glance it may be that the lower wages that are being paid to women have made them a more attractive alternative to fill job positions [even though that would be against the law].  However, don't expect StatCan to tell you the truth about the true causes of that.  For one thing, it seems that they won't be able to tell it even if they wanted to, unless they have far better data than that which they use to pull the wool over our eyes.

— Walter H. Schneider

Posted 1999 01 08
2001 02 10 (format changes)