Ottawa, October 9 - The unemployment rate is often perceived as an important indicator of an economy’s well-being. Canada's 2024 Unemployment census found that 4% of all Canadians are currently jobless. However, many demographics of people find themselves left out, meaning this term can be deceiving. Leading this journalist to question if that number is at all accurate, and which people are looking for work in Canada's current economy.

How is the Employment Rate Measured?

One of the most important employment surveys and the official source of the Canadian unemployment rate is Statistics Canada’s Labour Force Survey. This monthly survey of 53,000 households surveys the Canadian population of working age, classified as 15 and older, out of reserves, and unincarcerated. The survey is then further divided into three categories: employed, unemployed and inactive. The active population is composed of the employed and "unemployed," or those with a job or actively looking to obtain one. The inactive population are the people who neither have a job nor are actively looking for one. Reasons include inability to work, no desire to work or the belief there are no jobs in the market that they could occupy. This is the case with individuals unemployed for long periods, who end up being discouraged and abandoning their job search (Bilodeau and D’Amours, 14).

Unemployment status indicates not having a job, but being available and looking for a job. This does not include receiving Unemployment Insurance benefits, as most unemployed people do not receive such benefits, nor if these individuals have been employed prior. In other words, they were neither active nor unemployed. This category includes people who are retired, people on parental leave, full-time students, unemployed people who are not actively looking for a job, etcetera (Bilodeau and D’Amours, 14). 

The Canadian Unemployment Rate

There were 1.5 million unemployed people as of August 2024. Increasing 60,000 (+4.3%) from July and an upsurge of 272,000 (+22.9%) since August 2023. Among those who were unemployed in July, 16.7% had transitioned to employment in August. This was lower than the corresponding proportion in August of 2023 (23.2%), an indication that unemployed people may be facing greater difficulties finding work. On average from May to August 2024, the unemployment rate for returning students aged 15 to 24 was 16.7%, up from 12.9% in 2023. The unemployment rate for the summer of 2024 was the highest since 2012 (17.6%), excluding the summer of 2020 (The Daily, 2024).

What is Left Out

If you are a full-time student, regardless of whether you have a job, you are employed. This means the unemployment rate fails to account for employed and unemployed students, making it difficult to fully measure the realities of youth and young adult unemployment. People on active duty in the military are also considered outside of the labour force, despite the argument that military personelle contribute significantly to a country’s economy. Freelancers and gig workers who have recently lost clients are also not considered employed.

Another factor is the rate of job creation. Online recruitment platforms have made it easier to create and publish job postings. These platforms allow candidates from all over the world can apply for positions, however, make dubious job postings possible. The tech field particularly is no stranger to questionable job postings by companies that may not be real.

The unemployment rate also fails to account for labour under-utilization (King, 2024). Employed individuals are not always employed under the best conditions. Strikes, lock-outs, forced part-time work when someone can work full-time, and forced division of work where unnecessary are some instances where workers are met with barriers that prevent them from operating effectively.

Individuals who give up on their job search are considered inactive. Even if they have been looking for work for a long time and they need a job to survive. This sizable chunk of the inactive population can be helped, with training programs, volunteering opportunities, and overall better resources for job searching and job matching.

Why Care?

Why does it matter how unemployment is measured? We want our economic statistics to be as accurate as possible. If several groups are not properly measured in the unemployment rate and the unemployment rate as a whole is unreliable, this can lead to the perpetuation of systematic issues. One example of this is Indigenous unemployment. The Indigenous unemployment rate is often misrepresented by census data. Even then, unemployment in the Indigenous population is marginally higher, as suggested by Doretta Thompson, director of corporate citizenship and Financial Literacy leader for CPA Canada, commenting “Comparable economic participation would mean an additional $8.5 billion in income earned annually by a fully engaged Indigenous workforce. There would be 173,000 fewer Indigenous people living in poverty—reducing government spending on economic inequality by $8.4 billion annually.” (2023).

There is a need to pay attention to the inactive population. Many of the people in this category are not there willingly. Better workplaces for disabled workers, jobs that are well suited for people of retirement age, and easier access to employment for discouraged job-seekers would make for a more diverse working population, a better job market, and a better economy overall.

As stated in A Transformative Framework to Achieve and Sustain Employment Equity, “Access to stable and fulfilling employment is essential for economic empowerment and prosperity. By ensuring that all Canadians have equal opportunities in the workforce, we will help build a stronger and more inclusive society.” While it’s desirable to have a prosperous society, remembering each individual’s right to work, how they pay their bills, and how to help them feel fulfilled and accomplished is equally if not important to the longevity of a country's successful economy.

Works Cited

Bilodeau, Pier-Luc and D’Amours, Martine. Fondements des relations industrielles. Chenelière Education. ISSN: 978-2-7650-5950-9.

Blackett, Adelle (2023). A Transformative Framework to Achieve and Sustain Employment Equity. Employment and Social Development Canada. ISSN: 978-0-660-69154-1.

King, Adam D. K (2024). The Way We Measure Unemployment In Canada Is Broken. The Maple, https://www.readthemaple.com/the-way-we-measure-unemployment-in-canada-is-broken/ 

The Daily - Labour Force Survey, (2024). Statistics Canada, https://www150.statcan.gc.ca/n1/daily-quotidien/240906/dq240906a-eng.htm 

Thompson, Doretta (2023). This group adds about $30 billion to the GDP. It could be double. Chartered Professional Accountants Canada - Pivot Magazine, https://www.cpacanada.ca/news/pivot-magazine/indigenous-engagement