Chronic Rigidity: The East’s Labour Market Problem

• Main Authors: How To Fix It, Yvan Guillemette
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Published: 2007
• Subjects: Newfoundland
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.580.1492; http://www.cdhowe.org/pdf/ebrief_51.pdf

Canada’s generally good labour market performance over the past several years, exemplified in a 33-year, record-low unemployment rate, masks strikingly large regional disparities.1 In September 2007, the national unemployment rate was 6 percent, but it ranged from 2.8 percent in central Alberta to 17.8 percent in southern Newfoundland and Labrador. Such wide variances are also present within single provinces, from 5.4 percent to 12 percent in New Brunswick, for example, in that same month. These statistics suggest rigidity in Canada’s labour market. The economy creates jobs at a rapid pace, but people do not readily move to where the jobs are, leaving large pockets of unemployment. And hence our economy as a whole does not achieve its full economic potential. In previous work, I showed how, despite a 13-year downward trend in the unemployment rate, regional disparities in unemployment have increased (Guillemette 2006). To this end, I used a measure of the dispersion of regional unemployment rates around the national rate. Here, I use a slightly different