Saskatchewan Unemployment Numbers – More Statistics and Analysis

By Greg Hluska

Yesterday, I talked about a controversy that has erupted around Saskatchewan’s unemployment numbers.  Since unemployment is such a major factor in poverty, I felt it was important to give some more statistics about unemployment in Saskatchewan.

The Saskatchewan Party and the Provincial N.D.P. are looking at the same basic numbers and coming to two dramatically different conclusions.  The Saskatchewan Party says, “Regina and Saskatoon have the two lowest unemployment rates in the country.  Our future is bright.”  And the Provincial N.D.P. says, “But wait a minute, unemployment may be low, but more people are seeking unemployment benefits now than one year ago.  Things are not as bright as they seem, in fact, the sky is falling.”It has been my experience that, in politics, the truth always lies somewhere in between the two popular points of view.  And, in economics, you should never focus upon one particularly statistic – you have to analyze a system as a whole.  So, here is some more information on the whole system.  I think that if we look at all of this information together, we can get closer to the truth.

Let’s start off with the Saskatchewan Party’s point of view.  The Saskatchewan Party says, “We have the lowest unemployment rate in the country.  This is great news.”  They are correct in saying both of those things – we do have the lowest unemployment rate in the country, and it is great news.  However, just because we are the best in the country now does not mean that we have actually been moving in the right direction.  Consider this quote from the Government of Saskatchewan’s Labour Force Statistics from June 2009:

On a seasonally adjusted basis there were 524,800 persons employed in Saskatchewan in June 2009, up 1,600 from the May 2009 level of 523,200 and is up 14,800 from the June 2008 employment level of 510,000 persons.

The Saskatchewan seasonally adjusted unemployment rate for June 2009 was 4.6 percent.  This is a decrease of 0.3 percentage points from the May 2009 rate of 4.9 percent and 0.6 percentage points higher than the June 2008 rate of 4.0 percent.

Seasonally adjusted unemployment?  Does it sound like I’m playing a game with terminology?  I used seasonally adjusted unemployment because I think that applying a seasonal adjustment is the best way to understand underlying economic  trends.  Certain things happen every year at every time – why not account for the cylical nature of employment?

Semantics aside, this trend continues even if you look at the actual unemployment rate.

The Saskatchewan unemployment rate for June 2009 was 3.9 percent. This is a decrease of 1.0 percentage points from the May 2009 rate of 4.9 percent but 0.5 percentage points higher than the June 2008 level of 3.4 percent.

In June 2009, Saskatchewan’s unemployment rate was the lowest in the country, but it was still either 0.5 or 0.6 percentage points higher than it was in June 2008.  Now, is that really such good news?

Let’s take a look at some more raw numbers to see if we can learn anymore about the unemployment rate.  In June 2009, there were 535,600 people employed in Saskatchewan.  This is 14,500 more than were employed in June 2008.  Having more people employed is a good thing, right?  In fact, shouldn’t more jobs equate to a lower unemployment rate?

More jobs will equate to a lower unemployment rate unless there are more people looking for work.  And unfortunately, that was the case in Saskatchewan.  There were 18,000 more people in Saskathchewan’s Labour Force in June 2009 than there were in June 2008.  14,500 more workers versus 18,000 more people looking for work.  This means that there are 3,500 more unemployed people in Saskatchewan.

Those numbers in mind, is it any wonder that the N.D.P. is trying to raise awareness about the fact that there are more people receiving Employment Insurance now than in 2008?  In Regina, there are 760 more people collecting EI now than in 2008.  And, in Saskatoon, there are 1,620 more.  These raw numbers represent increases of 95% and 148.6% respectively.

So, we may have the lowest unemployment rate in the country, but we still have a higher employment rate than we had last year.  Sounds damning, but it is not.  You see, we have more people working in Saskatchewan now than in 2008.  And our labour force is also greater.  This means that people are either moving here in search of opportunities, or they are returning to the labour force.  Workers in Saskatchewan seem to feel hope.  And I think that is a good thing.

And to conclude, this story started with two disparate points of view and ended with a truth somewhere between the two.