What is this metric and why is it important?
Labour force statistics not only tell us about the health of the economy generally, but also provide insight into who is participating, who is excluded, and who is benefitting. Here we look at the portion of the labour force (those who are working or actively looking for work) who are unemployed.
How is Canada doing?
- In 2018 Canada’s unemployment rate was 5.4%, just below the OECD average of 5.8%.
- In Canada, the territories and Atlantic provinces had the highest unemployment rates, and Manitoba, BC, and Ontario had the lowest.
- In Canada, men had a higher unemployment rate by only 0.55 percentage points, compared to an OECD average of 0.54. The only countries with significant differences are Greece, Turkey, and Spain, with women having higher unemployment rates by 9.0, 4.4, and 3.4 percentage points respectively.
According to the OECD, “the unemployed are people of working age who are without work, are available for work, and have taken specific steps to find work.” Working age is defined as those aged 15 to 64.
While the innovation economy is not the economy at large, the distinction is often murky and ill-defined. Given the broad definition we use for the innovation economy, the unemployment rate in the larger economy gives a reasonable indication of the employment rate in the innovation economy. Differences across jurisdictions speak to the extent to which people have access to employment opportunities and the accompanying income and benefits.
Unlike the employment rate, the unemployment and participation rates rely on definitions of “the labour force”—i.e., the employed and those looking for employment. A limitation of this approach is that it can be difficult to define what it means to be someone who wants to work. Additionally, it can be difficult to interpret the unemployment rate without looking at both the employment and participation rates. If the unemployment rate decreases, it could mean that more people are finding a job, or that more people are giving up on finding a job and the labour force is getting smaller.