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Workdownload PDF version of Provincial BC Check-Up Four out of four of BC's work indicators improved in 2011: job creation (0.8%), unemployment rate (-0.1 ppt), educational attainment (1.5 ppt), and labour compensation per employee (1.6%) were all in positive territory last year. However, even with the increase, BC's rate of educational attainment (65.9%) still lagged Ontario (69.7%) and the national average (68.2%). BC also ranked last, and by a significant margin, for labour compensation when compared to Alberta, Ontario, and the national average. The table below shows how BC compared with Alberta, Ontario, and the national average on our four key indicators over one and five-year periods.
Notes: An increase in the value of these indicators (except for unemployment rate where a decrease indicates improvement) means an improvement in the quality of the province’s WORK environment. Job CreationJob creation is one of the most important and commonly used indicators to assess the state of the labour market. After a 1.7% increase in this indicator in 2010, BC’s job creation rate slowed in 2011, with an increase of 0.8%. This marked an absolute increase of 18,200 jobs, with the provincial total reaching 2.28 million. Most of these occurred in Vancouver, where the number of jobs rose by 31,100. However, this growth was offset by job losses in Victoria, Abbotsford, and other communities around BC. As in previous years, the service sector led the way, with a total gain of 13,400 jobs (an increase of 0.7%.) The greatest gains were in accommodation and food services (19,500 new jobs), professional, scientific and technical (7,800 new jobs), real estate and leasing (6,800 new jobs), and transportation and warehousing (5,500 new jobs). In contrast, there were substantial losses in the trade sector (-15,100 jobs) - a reflection of subdued domestic and international demand for these services. Other sectors reporting losses include finance and insurance (-9,200 jobs); health care and social assistance (-2,900 jobs); and public administration (-2,500 jobs), as government sought to reduce its spending. Compared to services, BC’s goods sector recorded a much smaller gain of 4,700 new jobs in 2011, an increase of 1.1%. Overall, employment in this area of the labour market was boosted by major investments throughout the province and 14,100 new construction jobs were generated in 2011. Non-durable manufacturing saw another 3,000 new jobs, while employment in mining, and oil and gas rose by 2,000 jobs. Nevertheless, these substantial gains were offset by losses in durables manufacturing (-4,900 jobs); agriculture (-5,700 jobs); and utilities (-1,200 jobs). It is notable that employment in BC’s manufacturing sector has steadily declined since the mid-2000s. In 2004, at its peak, it accounted for 206,000 jobs and 51% of the province’s goods sector employment. In contrast, by 2011, employment numbers had decreased to 163,900 jobs, or 37% of jobs in this sector. Rationalization and greater efficiencies in the forest products industry account for the majority of this decline. In 2011, BC’s job creation rate of 0.8% lagged Alberta, Ontario, and the national average (3.8%, 1.8%, and 1.6% respectively). BC also has a much higher proportion of part-time jobs than the other jurisdictions. Of the 18,200 new jobs created in BC, 48% were part time. Part of this can be explained by the decline of the manufacturing sector, where jobs are largely full time. In Alberta, 3.4% of all new jobs were part time, while in Ontario the share of part time jobs declined from 19.3% to 19%. In Canada overall, part time positions made up 19% of new jobs.
UnemploymentThe unemployment rate is a key indicator of economic health, reflecting the balance between the number of workers and available jobs. A sluggish US market, and concern over the growing European Union debt crisis dampened the BC economy throughout 2011, but was mitigated somewhat by brisk export growth to the Pacific Rim. The net outcome was a slight improvement in our provincial labour market. In 2011, BC’s unemployment rate declined by 0.1 ppt in 2011, to reach 7.5%. This marked the second consecutive year of decline. While our province’s labour force grew in 2011, the rate of participation declined slightly, and the growth in the number of jobs slightly outgrew the number of workers. Labour market conditions worsened slightly for BC’s youth in 2011. Youth unemployment increased by 0.2 ppt for the fourth year in a row, reaching 14%. As discussed in our regional reports earlier in 2012, there were some significant exceptions to this trend. For example, in Northeast BC, the youth unemployment rate shrank to 4.7% in 2011, well below the provincial average. Looking to other jurisdictions, Alberta again enjoyed the lowest unemployment rate in 2011 at 5.5% when compared to BC and Ontario (7.5% and 7.8% respectively). BC was on a par with the national average rate.
Educational AttainmentThe level of educational attainment in the labour force reflects the degree of knowledge-based industry in an economy, and is a hallmark of future productivity. In 2011, BC’s level of labour force educational attainment[7] continued to rise, reaching 65.9%. This is a marked contrast with a decade ago, when it stood at 57.8%, well below the levels recorded by Alberta and Ontario. Almost all of BC’s growth in this indicator occurred among workers with a bachelor’s degree or post-secondary certificate. However, last year marked the second consecutive year that BC recorded a decline (-6.2 ppt) in the number of workers with accreditation higher than a bachelor’s degree. This stands in contrast with the other comparison jurisdictions, where the fastest growing labour group were workers with educational attainment higher than a bachelor’s degree. Overall, while Ontario, Alberta, and the western provinces have also watched their levels of labour force educational attainment rise, BC has shown the fastest growth rate in the past one and five years (1.5 and 4.9 ppt respectively). Our province still lags behind Ontario and the national average, but the gap appears to be closing.
Real Labour CompensationReal labour compensation per worker captures real economic gains made by individual workers, netting out inflation effects. It is defined here as the ratio of labour compensation (wages and salaries and supplementary income paid to employees[8]) to the number of workers, adjusted for inflation with the Consumer Price Index.[9] It is calculated on a gross, pre-tax basis. Since the early 2000s, Canadians have generally enjoyed rising real wages. A booming construction sector, and increases in the price of oil and other commodities have boosted wages in the resource industry. Higher educational attainment has also contributed to this trend. In particular, women with post-secondary education have seen their real wages grow. In BC, real annual labour compensation per employee increased by 1.6% to reach $48,244 in 2011. This was the third year in a row that real labour compensation rose in BC. Strong commodity prices and a surge of construction, particularly in southwest BC and the northeast, translated into higher paying jobs in the construction, manufacturing, and transportation industries. BC’s steady rise in labour force educational attainment also contributed to growth in real labour compensation in the goods and services sectors. In 2011, Alberta saw the largest one-year increase in real labour compensation per worker of all jurisdictions, growing by 1.8%, to reach $67,220, the highest level in Canada. Employment in the province’s red hot energy sector was the driving force behind this trend. Alberta’s gain also boosted the Canadian average real compensation by 0.2%, to reach $51,397. Ontario bucked the national trend with a 1.6% decline in real per capita labour compensation. Looking at five year averages, Alberta enjoyed a remarkable 7.5% increase in real compensation between 2006 and 2011. This was reflected in the national average gain of 3.2% over the same period; BC’s real compensation rose by 2.3%. In Ontario, however, real compensation declined slightly by 0.5%, reflecting the loss of many highly-paid manufacturing jobs, especially in the automotive sector.
Footnotes
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