To:Bobby Yellin who wrote (108)
From: John Barendrecht Saturday, Jun 21, 1997 3:08 AM
Respond to of 79910
Canadians hesitant to leave home in search for jobs
Analysis: That Canadian workers aren't as mobile as their American counterparts may not only help explain the difference in jobless rates, but also an equally large gap in unemployment levels within Canada.
Eric Beauchesne
The Ottawa Citizen
Fortune, the U.S. business magazine for the rich and would-be rich, argues that economically, Americans have never had it better.
"These are the good old days," it says in its latest issue, arguing that "business is booming, inflation is falling, jobs are plentiful and American industry is way out front."
And President Bill Clinton is in Denver holding up the U.S. economy as a role model for his G-7 partners and Russia's Boris Yeltsin.
Four years ago, Prime Minister Jean Chr_tien promised Canadians that returning the Liberals to power would also bring a return of the "good old days" here.
So far, it's another unfulfilled Liberal promise with unemployment stuck near 10 per cent, double that in the U.S., which, at 4.8 per cent, boasts the lowest jobless rate in the industrial world.
For Canada, "this is the second-worst decade this century in terms of economic growth," says Robert Fairholm, an economist with research firm DRI Canada.
"And that's also assuming a very substantial snapback in the last three years of the 1990s."
A comparison of key economic indicators reveals that this decade has been a lot less generous to Canadians than Americans.
Not only is unemployment a lot higher, economic growth has lagged behind the U.S. in most years. And personal disposable income, unlike in the U.S., is less than it was, not just at the start of the decade but at the end of the 1970s.
Analysts agree that a major reason Canada trails the U.S. is that industry here, sheltered by an undervalued dollar, delayed until this decade the painful restructuring that U.S. industry experienced in the 1980s to meet the increase in global competition.
That also explains the lagging productivity of Canadian workers, they say.
Still, Bank of Canada governor Gordon Thiessen has repeatedly insisted that the good old days -- the 1960s -- are almost back, thanks to low inflation, disappearing government deficits, the ensuing fall in interest rates and the industrial restructuring that has now taken place.
In fact, he sees no reason why Canadians can't have the U.S.'s rock-bottom unemployment if only they had the same get up and go as American workers.
The problem, he says, is "our labour market is not as flexible as the Americans" are.
"I'm always amazed at the willingness of Americans to move from one end of the country to the other in the event that they think the jobs are there. So that when suddenly in New England the expansion that they had slowed down, a remarkable number ended up moving to the southwest.
"That doesn't tend to happen in Canada," he says.
"Indeed, it doesn't tend to happen in any of the industrial countries that I know, and it's also the case that nobody has an unemployment rate in the industrial countries as low as the Americans."
That Canadian workers aren't as mobile as their American counterparts may not only help explain the difference in jobless rates, but also an equally large gap in unemployment levels within Canada.
Despite recent strong growth in the economy and jobs, unemployment in the five provinces east of the Ottawa River remains well into double digits ranging from 20.5 per cent in Newfoundland to 12 per cent in Quebec.
Just as Canada's jobless rate is double that of the U.S., the average rate in those provinces -- 15.1 per cent -- is more than double the 7.1 per cent in the other provinces, where unemployment ranges from 5.8 per cent in Alberta to 8.8 per cent in B.C.
Maybe there are too many people in Atlantic Canada for the number of jobs, says Mr. Fairholm.
However, there are also deep demographic divisions in Canada's economy.
Among youth 15 to 24, the jobless rate is 17.2 per cent and would be even higher but for a growing proportion not in the labour force and, therefore, not counted among the unemployed.
In contrast, unemployment for workers 25 to 54, the core working age, at 8.2 per cent, is less than half that of younger workers. For Alberta men 25 to 54, a mere 4.6 per cent are unemployed.
DRI's Fairholm, despite his critical assessment of the performance of the Canadian economy this decade, says the outlook is brightening rapidly and the geographic and demographic disparities will narrow.
"We've had a miserable time so far in the '90s, but prospects do look an awful lot better," he says. "The good times are just starting."
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