The Sixth Estate

As usual, the moment StatsCan’s monthly jobs survey numbers go even slightly squirrelly, the media proves utterly unable to handle it. When news broke yesterday, Canadians were variously told that the employment rate was unchanged, that the job market was in bad shape, and that the job market was doing unexpectedly well. Incidentally, we were also told that fossil fuel exports fuelled a massive drop in BC’s unemployment rate from 7.4% to 6.6%, which is another distortion I’ll touch on at the end.

Obviously professional journalists lack sufficient education (read: a first-year economics course) to read a simple jobs report. So here’s what did happen in last month’s jobs market:

Actually, before we start, we should clear away some myths. First of all, the unemployment rate doesn’t actually measure the number of people who want to work but can’t find a job. It measures the number of people who want to work and are actively looking for work. If you realize there’s no work in your area and simply give up looking for a month or two, through the statistical alchemy of the jobs survey, you cease being unemployed. And then, if you start looking again, you become unemployed. This can lead to some weird results, like the unemployment rate going up at the same time as the total number of jobs increases, and the unemployment rate going down even as the number of jobs falls. We’ve seen both those results during the present recession.

Now, to the figures. I should warn you, it’s pretty dangerous trying to make grand decisions about the state of the economy based on the shift in job figures over a single month. I’m going to do it only to show up the fatuousness of what usually passes for responsible journalism in the majority of media outlets in this country, apparently including the state broadcaster. But my personal position is that the official unemployment rate is about as useful to our democracy as the constant stream of party and leader popularity polls we’re bombarded with through the media nowadays… which is to say, pretty much useless.

First of all, the headline unemployment rate did dip last month, following the net creation of 7300 jobs. Much more significant than job creation, however, was the number of discouraged unemployed people leaving the job market. Over the past month the unemployment figure has fallen by 24,000 people. Obviously most of those people didn’t get a job; so they’ve simply given up looking.

Second, to the extent that this jobs report is “good” news, it’s entirely about government-funded, public-sector good news. Last month the private sector shed a total of 26,000 jobs. That was offset, if only just, by job creation in the public sector. Some of the steepest declines were in agriculture and natural resources.

I mentioned the weird situation in BC specifically because of the pathetic nature of the CBC’s article on the subject. The state broadcaster engages in a typical he-said-she-said routine: the government says it’s great news that shows oil and gas growth, the opposition says it’s bad news that shows a falling economy. Who’s right? Apparently there’s no way to tell. It’s all one big mystery. Everyone has their own version of truth, and the media’s responsibility starts and ends at faithfully quoting everyone’s version.

Bullshit. The figures are part of the monthly report, and can be read by anyone, even journalists. And what they show is that the provincial economy added a grand total of 3600 jobs last month, all told (not just in oil and gas). That can’t cause the almost full-percentage point drop in unemployment in the province, not unless you believe that in a province of over 4 million people there are only around half a million workers.

No, once again, the real story was that in British Columbia alone, 21,400 unemployed people stopped being unemployed last month. Now, we know that only 3600 of them actually got jobs. So the other roughly 18,000 people have given up looking for work.