../Morning Post
Posted November 9, 2009
2009 Stimulus Nonsense

Dismal Job Report Highlights Need for More Government Support, Not Less, CAW says

TORONTO - Responding to the bleak job market figures released by Statistics Canada today, CAW President Ken Lewenza said the federal government must use this as an opportunity to provide more support to the Canadian workforce, through more stimulus funding and significant increases to EI benefits.

"It's clear that Canada, especially the private sector, is still mired in a recession. Our economy is still shrinking and jobs are still being lost by the tens of thousands," Lewenza said. "It's not that Canada's recovery has so far been fragile, or uneven, or uncertain. There simply has been no recovery."

Monthly job figures for October show a dramatic loss of 43,000 jobs in Canada, pushing the country's unemployment rate back up to 8.6 per cent. The ongoing drop in labour market participation rates (which includes discouraged workers who have stopped looking for work) pushes the unemployment rate even higher, to over 10 per cent.

The manufacturing sector experienced a steep decline in jobs (11 per cent fewer) in the past year, as did other goods producing sectors like construction. The largest employment drop in October 2009 was seen in the retail, wholesale and broader service sectors (a loss of 51,000 jobs), sectors heavily comprised of both women and young workers - the two groups that accounted for all of the employment decline in October.

"We have made the point time and again that the service sector will be whip-sawed by huge drops in the manufacturing and goods producing sectors, and today unfortunately were proven right," said Lewenza. "The challenge now is that workers in these largely non-unionized industries do not have the same transitional supports and services provided to unionized employees, which creates an even heavier burden for them during bad economic times." CAW Economist Jim Stanford said governments frightened by cyclical deficits and planning deep budgetary spending cuts in response to those deficits are taking the wrong approach to dealing with this bad economic situation.

"Canada will need more government stimulus in the years to come, not less," Stanford said.

Pointing to the experience in the United States, Stanford said that while the economic picture is not completely rosy, the U.S. has seen higher-than-expected economic growth in recent months, which is a more promising sign of recovery than the negative economic growth reported for Canada in August.

"Stimulus spending in the U.S. has outpaced Canada's by a margin of 7 to 1," Stanford said. "Not surprisingly, jobs in Canada have fallen at a rate more than twice as fast as the U.S."

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