July
10, 2004
Rebound
or Slowdown?
Part
of the Campbell government's response to their collapse in
the polls is to push the message "the economy is on the
rebound". The Vancouver Sun dutifully helped by
displaying that message in a headline that spread across the
page under a graphic which misrepresented unemployment in
BC. The chart displayed BC's seasonally unadjusted unemployment
rate from January 1994 through June 2004 with highlights added
at October 1997 and September 2001.
The
seasonally adjusted unemployment rate in BC was 6.8% in May
2001, and 7.5% in June 2004. Employment growth rates peaked
in the period 1992-1995, reaching a high of 5.1%. June 2004
employment was 3.5% higher than June 2003 (seasonally adjusted).
The graph displayed here, made using data from Statistics
Canada, removes the distortions in the Sun's artistic
rendition. The dotted line is seasonally unadjusted; the solid
is seasonally adjusted. It shows that there was a decline
in the unemployment rate from January 1991 through May 2001.
Unemployment increased following the election of the Campbell
government, and has now finally reached a level only slighter
higher than when they took office.
The Sun
article noted that since January 2004, BC employment has increased
by 0.4% compared to 0.9% for the Canadian average over that
period. The story went on to say that BC achieved a much higher
growth rate relative to Canada over the previous 12 months.
Going from a higher growth rate to a lower rate is usually
called a slowdown, not a rebound.
The increase
of 27,200 in employment between May and June is unusual, but
not unprecedented. Between January and February, BC lost 36,400
jobs. Statistics Canada provides details by industry on changes
in employment and this shows that of 16 industrial categories,
BC lost jobs in 8 categories in June. Most, 11,800, of June's
job gains were in the category labeled "information,
culture and recreation". Information does not refer to
information technology; it refers to newspaper publishers,
radio stations and similar media. Recreation includes casinos.
BC opened a new 24-7 casino in June, and allowed the existing
casino in Burnaby to go to a 24-7 operation. Labour Minister
Graham Bruce has claimed that the June employment numbers
are related to a recovery in tourism but they could be nothing
more than a reflection of the government's policy to expand
gambling. The classification of "information, culture
and recreation" showed no growth since May 2001. It will
take a few more months to determine whether June was an abnormality
or a real change.
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