The Real Job Situation in Ontario: Ugly

Since the governing Liberals have proven to be inveterate liars as we have documented many times, we thought we would review the latest job statistics for Ontario. As background, particularly for understanding what seasonal adjustment means, read The Lies My Mommy Told Me, Part II.

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The Actual June Statistics Canada Numbers

First we look at the last year's worth of data in CANSIM Table282-0087, Labour force survey estimates (LFS), by sex and age group, seasonally adjusted and unadjusted monthly. From June 2013 to June 2014, the number of people employed increased by 22,000. This is composed of an increase of 31,200 full-time jobs and a loss of 9,200 part-time jobs. This reflects a modest improvement, year over year, in the job situation with a net increase and a likely conversion of part-time into full-time jobs. Now let's look at the job numbers in various sectors of the economy for the same period in CANSIM Table282-0088, Labour force survey estimates (LFS), employment by North American Industry Classification System (NAICS), seasonally adjusted and unadjusted. Table 1 shows the two sectors, goods producing and service producing, along with a few sub-sectors that had the greatest effect on month-to-month changes. Table 1. Changes in employment in Ontario by sector and sub-sector for the period June 2013 to June 2014. Numbers are in thousands of persons, year-over-year (yoy) and month-over-month (mom).

Sector/Sub-Sector	yoy change	mom change
Goods Producing Sector	-31.8	+14.9
Natural resources	-3.2	+6.0
Construction	-4.2	+15.3
Manufacturing	-24.3	-2.3
Services Sector	+53.8	+22.7
Health care	+40.6	+16.5
Education	-0.8	+8.2
Public administration	-11.6	+12.6

Source: Statistics Canada, CANSIM table 2820088.

Discussion

The goods producing sector in Table 1 shows a loss of 31,800 jobs over the last year. This is the sector that produces tangible assets or wealth in a society. In particular, the loss of 24,300 manufacturing jobs in an economic recovery is a disaster. The monthly increase posted this month is due to seasonal jobs in the construction and natural resource sectors. Indeed if we look at construction jobs, the Ontario economy added them into August last year at which point there were steady losses into February of this year showing the seasonal or cyclical nature of the sector. The cycle in the resource sector is a little noisier but similarly seasonal. Turning to the services sector a gain of 53,800 jobs yoy and 22,700 jobs mom. Many sub-sectors either are neutral in terms of wealth creation or are negative. So on the surface what appeared to be a modest net gain of jobs over the year in fact is a net shift from wealth production to wealth destruction. The increase of 37,300 jobs over the last month in health care, education, and government is not where we want to see growth in a failing economy such as Ontario's. We wonder why 8,200 staff in the educational sector were hired when it is the end of the school year?

Seasonal Adjustment Revisited

We discussed the government's use of "Net Debt" rather than "Total Debt" or "Consolidated Debt" when dealing with the media and the public (read: Ontar-I-Owe). The reason is that the figure is smaller than Total Debt. But Total Debt is the debt that we pay interest on and the money we owe to third parties. For the same reason we crticized the government for using seasonally adjusted data (read: The Lies My Mommy Told Me, Part II ) in place of actual employment numbers because they made the employment picture appear brighter than it was. The reason why the real job numbers--the non-seasonally adjusted data--are important is that they reflect the number of jobs that are paying into the economy including tax revenues. When a person moves from a position of employment to one of non employment, he becomes a net economic drain on society whereas before he may have been a net contributor to society.