Detailed look at B.C.'s job trends shows Clark exaggerated claims By John Twigg

The Daily Twigg Vol. 1 No. 29  March 20, 2012

Detailed look at B.C.'s job trends shows Clark exaggerated claims

By John Twigg

Since I sort of "miscued" recently in my critique of Premier Christy Clark's job creation claims (by pulling a wrong stat out of a jumble of numbers) I felt an obligation to dig a bit deeper into the area to see if I could better understand it and then better portray exactly what has been going on in B.C.'s labour force, and what I did find - no surprise - is a situation far less positive than what Clark was claiming.

On one hand that means my quickly-published apology to her was way more abject than it needed to be, and on the other other hand it is all the more concerning because it further confirms that Clark lately has been doing far too much of that sort of exaggerating and dissembling in far too many policy areas, even including the province's financial picture (with the budget's low-balled revenue forecasts) and now with the very important jobs picture too (in which Clark cherry-picked a few sweet statistics rather than revealing the actually-weak overall trends - albeit with a great outlook for years ahead).

To put it all in a bit of context, let's review how Clark on March 13 staged a photo op at Seaspan Marine Shipyards in North Vancouver to release a six-months progress report on her "Canada Starts Here" job creation program "which clearly outlines the steps taken by our government to promote economic investment and job growth in British Columbia" but which nonetheless downplayed the huge role public-sector projects have played in bolstering B.C.'s employment numbers in recent years.

To be fair, the gist of the news release was that numerous initiatives are under way to help speed along a variety of major projects that will add a lot of jobs in the next 10 to 20 years, but to suggest that many or even any of the recent seasonally-adjusted job gains were already due to a six-months-old program of mainly forming gabfest committees was a bit of a stretch and another example of Clark's tendency towards too much hyperbole, and really what the employment and labour force statistics show is that only now is B.C.'s total number of jobs getting back to where they were before the global economic crash of 2008.

Furthermore, if Clark had used the actual rather than the seasonally-adjusted numbers and then done that for only the six-months period since her jobs plan began then there has actually been a loss of more than 30,000 jobs!

"According to the latest data, we are see(ing) real results from our focussed efforts. British Columbia has added 39,900 net new jobs to the economy," Clark said in a news release, not mentioning that they were seasonally adjusted and thus theoretical or even mythical jobs and sure sounding like she believes that number proves her efforts are already paying dividends, or at least hoping that voters might believe that. [Professional economists point out that the best measure of job changes is an annual comparison, whether actual or seasonally-adjusted, but it was Clark who cited the six-months period then used a 12-months number.]

The same theme was echoed by Jobs, Tourism and Innovation Minister Pat Bell, who apart from a glitch on the B.C. Place naming controversy has been working hard and performing relatively well in a demanding portfolio.

"The jobs plan has three key pillars - opening markets, particularly with the Asia Pacific, strengthening our infrastructure to get goods to market, and working with employers and communities to encourage job creation. I'm encouraged to see that in the first six months progress is being made on all these fronts, and am eager to see the results of the next six months," said Bell.

But far worse than the cherry-picking of statistics is the reality that B.C.'s employment market has been somewhat week for several years now and in some industries many thousands of jobs have been lost that may never come back, notably a shocking 45,000 jobs lost in forestry and forest products since the year 2000, which is approaching the loss of roughly half of all of the 100,000 forest-related jobs in 2000.

B.C. job numbers crashed in 2008

So without being distracted by new boards and task forces and LNG plants in the sky with diamonds, let's look at some key numbers, namely jobs by industry from the year 2000, which is the last full year of an NDP government, and the same job categories for 2011, which is the most recent full year of the B.C Liberal Party regime, and along the way we'll note some peak-and-valley numbers from in and after 2008 - the year the global economy crashed and B.C. jobs dropped too, and the same year that then-premier Gordon Campbell began getting desperate to find ways to help him win the election scheduled for May 13, 2009 and which process ended up with him lying about the size of the deficit and afterwards forcing in the Harmonized Sales Tax to try to hide that lie.

Services gain while manufacturing shrinks

How has the B.C. economy's job creation done in recent years? Actually not too badly compared with other jurisdictions, but it has struggled and only now is getting back to the peaks of 2008 and interestingly those peaks are only about the same height as the levels reached in year 2000, but within the overall numbers we see there have been some serious jobs losses in logging and forest products in particular and in manufacturing in general, which have been replaced numerically by new jobs in service industries but not replaced in GDP values (because resource jobs tend to pay a lot more than service jobs).

First we will note that B.C.'s population in 2000 was an arithmetically-convenient 4.0 million people, there were 1.93 million people employed and the unemployment rate was 7.2% - arguably a sort of positive culmination of a decade of NDP economic policies.

By 2008 the population had jumped to 4.38 million, employment was up to 2.26 million (then the historic high) and unemployment was only 4.2% - arguably the best year ever in the best place in the world - until financial shenanigans in New York crashed global stock markets and wiped out trillions of dollars of wealth in a criminal conspiracy that hopefully some day soon will be exposed as such.

Then in 2009 the population grew again to 4.46 million but employment fell to 2.21 million and unemployment jumped to 7.7% even though there was a big blip up in private-sector job creation (see the "Creating jobs" graph in the 2012 budget documents), which obviously was related to pre-building facilities for the Vancouver winter Olympics and other related spin-offs [which appears to have been a pubic-financed event booked as a private-sector project].

In 2010 the population edged up to 4.53 million but employment recovered to only 2.25 million and the unemployment rate was 7.6%, perhaps because the economy was depressed by the then-new hated HST.

And finally in 2011 the population grew again to 4.58 million, employment set a new record of 2.27 million and unemployment eased slightly to 7.5%, which suggests that the departure of Gordon Campbell as Premier and his replacement with Christy Clark in March did little if anything to stimulate growth and job creation even though Clark issued a new plan to do just that in September.

More recently the latest B.C. Stats labour force report showed B.C.'s employment was still at 2.27 million in February 2012, a gain of about 43,200 jobs since February 2011 using the actual data, but on the seasonally adjusted basis the employed was at 2,300,800, up 39,900 jobs from the same month last year - which was the figure cited by Clark in the news release, on twitter, in Question Period and many other places.

For an interesting analysis of the merits and drawbacks of using actual or seasonally adjusted data, and using annual versus seasonal comparisons, see David Schreck's piece of March 15 on www.strategicthoughts.com, which notes that B.C. has lost 134,000 full-time jobs if - IF - one wanted to compare the peak in July 2008 with the latest number in February this year.

Schreck also cited an article by Andrew MacLeod on the Tyee website (see "Clark's jobs plan worked better before it was announced") which noted that the jobs gain between September and February was only about 2,000 on a seasonally-adjusted basis but on the actual or unadjusted basis there had been an apparent loss of 33,400 jobs - which was in marked contrast to the gain of 39,900 jobs on the annual seasonally-adjusted basis that Clark chose to use.

Seasonally-adjusted gain masked actual job losses

MacLeod reported that in the six months since Clark announced her jobs plan, B.C. gained just 2,000 jobs, using seasonally adjusted figures, but "since employment is generally stronger in the summer, the picture becomes worse when you consider actual employment numbers. While there were 2,304,200 working in the province in Sept. 2011, that dropped by 33,400 jobs to 2,270,800 in Feb. 2012."

So, it turns out that my initial claim in DT26 that Clark had fudged the jobs picture by deliberately choosing the seasonally-adjusted series instead of the actual series was actually correct, and that I probably need not have apologized as quickly and abjectly as I did. (My error was a sort of apples-and-oranges slip-up or miscue because I quoted figures for the overall labour force instead of for only the employed ranks - so I got the facts right but the stats wrong.)

Anyway one thing is clear, at least, and that is that the employment picture can be changed dramatically depending on which measures are used and what time period they are applied to but almost all of the leading economists agree that "The job market in B.C. is not especially robust at the moment," as one of the leading private-sector experts put it to me in a recent email.

One of the better analyses published about these trends was by Central 1 Credit Union's Brian Yu which appeared in the March 10 Vancouver Sun under the heading "B.C. labour market grows modestly in both type and number of positions" and emphasized that B.C.'s employment performance was better than in most other provinces and thus held the unemployment rate steady at 6.9% in February even though the labour force had increased.

"February's employment boost provided some support to a lacklustre post-recession job market recovery," wrote Yu, noting that on a year-over-year basis the gain was only 1.8 per cent.

The New Democratic Party Opposition caucus also was quick to critique the employment statistics, issuing a "Reality Check" on March 9 claiming that the Liberal record on jobs is "hardly worth crowing about" [which didn't stop Clark from doing so, and didn't stop the Vancouver Sun from putting her misleading message on page 1 on March 14].

"The Liberal record on job creation is at best mediocre. Put in context of the worst-in-Canada rankings of poverty and absolute inequality, it's clear the Liberals have utterly failed British Columbia families," said NDP finance critic Bruce Ralston, citing worsening job quality, stagnant wages and increased inequality.

"A modest increase in full-time employment has the Liberals claiming victory, but the real story is that British Columbians have less stable employment and less likelihood of family-supporting jobs under the Campbell and Clark governments," the NDP release concluded.

Forest-related jobs cut in half

That was certainly true in Forests and Logging, which fell from 35,500 jobs in year 2000 to only 14,000 jobs in 2011, and that was repeated in Wood Product Manufacturing, which fell from about 46,000 jobs in 2000 to 30,000 in 2011, and in Paper Manufacturing, which fell from 17,700 to 9,200 in the same period, all of which when combined with other subcategories such as textiles and chemicals and certain services means that B.C. has lost almost half of the approximately 100,000 forest-related jobs that it had in year 2000 - according to Statistics Canada and B.C. Stats tables of employment by industry.

That was a large but by no means only part of an overall loss of jobs in manufacturing, from just over 200,000 jobs in year 2000 to less than 165,000 jobs in 2011, such as transportation equipment falling from 13,200 to 9,000 in the same period, but on the positive side food and beverage manufacturing grew from 23,500 jobs to 30,300 jobs.

So while Clark no doubt would like to boast about gains in private-sector manufacturing, the numbers just would not support it in an overall way, and would work only in smaller cherry-picked ways (such as B.C.'s burgeoning wine industry).

Where the jobs growth action has been concentrated is in services, which ballooned from 1.52 million jobs in 2000 to 1.83 million jobs in 2011, featuring some reasonable gains in trade (up 50,000 to 355,000) and transportation (notably up 10,000 in transit), in real estate (up about 50% to 44,000), professions (up almost 50,000 to 182,000) and business services (up 25,000 to 94,000) and especially in food services (up 25,000 to 144,000) and Arts, Entertainment and Recreation (up about 50% to 60,000).

Public sector employment by comparison has been quite constrained, with federal, provincial and local government growing less than 20,000 to only 109,000 and local governments actually shrinking, but population pressures of aging and in-migration have pushed health and social services up 60,000 to 260,000 and education growing 30,000 to 167,000.  However that is a bit misleading because primary and secondary education has gained only about 3,000 to 90,000 while "other" educational services (probably the plethora of private-sector colleges) have grown about 50% to more than 75,000.

So the jobs picture in B.C. is not the happy success story that Premier Clark would like us to believe it is, and really a closer look at trends within industries indicates there is much to be desired.

And that is true whether you look at it in actual or seasonally-adjusted statistics, or in six-month, three-year or 11-year windows.

It's also true that the very large inventory of major projects now in planning stages should boost B.C.'s job numbers but even that will become a problem because the province already has an acute shortage of trained specialists such as heavy-duty mechanics and so far little is being done to launch new training programs.

Not to mention that virtually nothing is being done to help low-skilled workers and unemployed unemployables to find their ways into the workforce.
 
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