According to the most recent jobs report released by the Department of Labor, the US unemployment rate has fallen to an eight-year low of 4.9%. The Organization for Economic Cooperation and Development (OECD) considers the US at full employment when the unemployment rate is between 4% and 6.4%
While this appears to be positive news, it should be pointed out that the unemployment rate alone is a vague parameter when other statistics are not also taken into consideration. The labour force participation rate – defined as the number of people over the age of 16 who are working, full or part time, or actively seeking employment – should also be take into account, for example. The current labour force participation rate of 62.7% is at its lowest level since February 1978.
Those claiming that the low unemployment rate at present is evidence of a healthy job market have also been widely criticised for failing to account for the high existing levels of discouraged workers. These are people who have given up their search for a job, and have therefore left the labour market.
Others note that factors such as retiring baby boomers, as well as more young adults attending college and choosing to stay in school longer, were factors in a pre-recession predicted decline in labor force participation. With evidence that many baby boomers are choosing to retire earlier than they previously expected, mainly due to a pessimistic outlook on the economy, and persistently high unemployment among working age minorities, the truth is likely somewhere in between.
In neighbouring Canada, the unemployment rate is moving in the opposite direction, with current estimates placing it at 7.2%. This is higher than it has been in recent years, as low oil prices have continued to cost jobs. Provinces with an economic dependency on oil have been particularly impacted. Alberta’s loss of 10,000 jobs last month helped to drive the province’s unemployment rate above the national average for the first time in over a decade to 7.4%.
Alberta boasts Canada’s highest labour force participation rate of 72.7%, Workers in this province are among the nation’s best educated, highest earning, and most productive. The effects of low oil prices are now being felt throughout Alberta’s previously healthy economy, and other industries that have traditionally been supported by those employed in the oil & gas industry are beginning to see declines as well.
With little near-term relief in sight for the oil industry, other Canadian provinces such as British Columbia and Ontario – where manufacturing industries have fared better in recent times, have begun holding job fairs in Alberta in order to attract laid off workers into industries elsewhere within Canada.