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How education narrowed the jobless gap between Quebec, Ontario
KONRAD YAKABUSKI
Globe and Mail Update
July 12, 2007 at 7:09 AM EDT
MONTREAL — There are some things you just know you'll never live to see.
Like Paris Hilton winning a Nobel Prize. In Physics. Or Stephen Harper as grand marshal in the Pride parade. In drag. And somehow, you're okay with that because it suggests a certain order to the universe.
Then, just like that, the world turns upside down and you're no longer sure of anything.
On Friday, Statistics Canada reported that the unemployment rate in Toronto, Canada's supposedly solid financial centre, surpassed the jobless level in Montreal, Canada's proverbial second city. No one even remembers the last time that happened, if it ever did.
In June, the jobless rate stood at 6.5 per cent in Montreal, compared with 6.9 per cent in Toronto. A year ago, Montreal's unemployment rate was almost 40 per cent higher than Toronto's - 8.5 per cent compared with 6.2 per cent.
Now go back 20 years, and the turnaround in Montreal's labour market is amazing. In June, 1987, the city's jobless rate was 10.2 per cent, while Toronto's was a comfortable 5.2 per cent. Even at the height of the last great boom, in the summer of 1988, Montreal still struggled with unemployment at 9.2 per cent, almost three times the 3.2-per-cent rate in Toronto.
Sure, Statscan uses a three-month moving average and smaller sample size to track unemployment in major cities, so there is a greater margin of error than with the national and provincial numbers. So what do the latter show? The same narrowing trend.
In fact, with unemployment at 6.5 per cent in Ontario and 6.9 per cent in Quebec in June, the labour markets of the two provinces have never been so in sync. That's obviously better news for Quebec than for its neighbour.
In 1977, for instance, unemployment in Ontario stood at 6 per cent. In Quebec, it exceeded 11 per cent. That five-percentage-point gap has, with some variation over the economic cycle, been shrinking steadily ever since.
This flies in the face of almost every economist's prediction that higher taxes, higher rates of unionization, a higher minimum wage (as a percentage of the average manufacturing wage) and a higher regulatory burden would serve as a brake on job growth and condemn Quebec to chronic double-digit rates of unemployment.
Of course, part of Quebec's most recent spurt in job growth is due to good 'ol politicking. Premier Jean Charest rushed to disburse a pay equity settlement with public sector workers smack dab during the March election campaign, putting $1.8-billion into the pockets of consumers, which has led to lineups at the cash register as women shoppers - the pay equity beneficiaries are all female - blow their windfall on kitchen renovations and summer outfits. Stores are hiring like crazy, offsetting the devastating impact of the near-parity CanBuck on export-dependent manufacturing jobs.
Still, the short-term boost from pay equity payouts doesn't account for the steadily shrinking unemployment gap between Canada's two biggest provinces. That phenomenon is decades in the making.
So what's behind it? The short answer is education. Four decades ago, fewer than half of working age Quebeckers had a high school diploma. Today, post-Quiet Revolution Quebeckers are among the best educated Canadians. In fact, in 2006, fully 69 per cent of Quebeckers between the ages of 25 and 44 had either a college or university degree, compared with 65 per cent of Ontarians, according to recent study by Université du Québec à Montréal economist Pierre Fortin.
The impact of higher education levels is borne out in the employment rate, or the percentage of Quebeckers of working age who have jobs. It stood at an all-time high of 61.1 per cent in June, within striking distance of Ontario's rate of 63.5 per cent.
Prof. Fortin notes that the employment rate among those between 25 and 54 - the age group that covers those who've finished schooling but haven't yet been tempted by early retirement - has actually converged in the two provinces, at about 80 per cent.
An aging population promises an even tighter labour market in Quebec in coming years, as the number of people entering the work force falls below the number leaving it. Eventually, though, demographic decline - and the slower economic growth it entails - could cancel out many of the gains Quebec's job market has made in recent years.
Still, there's no denying Quebec's labour market its due: It's come a long way, bébé.
kyakabuski@globeandmail.com
KONRAD YAKABUSKI
Globe and Mail Update
July 12, 2007 at 7:09 AM EDT
MONTREAL — There are some things you just know you'll never live to see.
Like Paris Hilton winning a Nobel Prize. In Physics. Or Stephen Harper as grand marshal in the Pride parade. In drag. And somehow, you're okay with that because it suggests a certain order to the universe.
Then, just like that, the world turns upside down and you're no longer sure of anything.
On Friday, Statistics Canada reported that the unemployment rate in Toronto, Canada's supposedly solid financial centre, surpassed the jobless level in Montreal, Canada's proverbial second city. No one even remembers the last time that happened, if it ever did.
In June, the jobless rate stood at 6.5 per cent in Montreal, compared with 6.9 per cent in Toronto. A year ago, Montreal's unemployment rate was almost 40 per cent higher than Toronto's - 8.5 per cent compared with 6.2 per cent.
Now go back 20 years, and the turnaround in Montreal's labour market is amazing. In June, 1987, the city's jobless rate was 10.2 per cent, while Toronto's was a comfortable 5.2 per cent. Even at the height of the last great boom, in the summer of 1988, Montreal still struggled with unemployment at 9.2 per cent, almost three times the 3.2-per-cent rate in Toronto.
Sure, Statscan uses a three-month moving average and smaller sample size to track unemployment in major cities, so there is a greater margin of error than with the national and provincial numbers. So what do the latter show? The same narrowing trend.
In fact, with unemployment at 6.5 per cent in Ontario and 6.9 per cent in Quebec in June, the labour markets of the two provinces have never been so in sync. That's obviously better news for Quebec than for its neighbour.
In 1977, for instance, unemployment in Ontario stood at 6 per cent. In Quebec, it exceeded 11 per cent. That five-percentage-point gap has, with some variation over the economic cycle, been shrinking steadily ever since.
This flies in the face of almost every economist's prediction that higher taxes, higher rates of unionization, a higher minimum wage (as a percentage of the average manufacturing wage) and a higher regulatory burden would serve as a brake on job growth and condemn Quebec to chronic double-digit rates of unemployment.
Of course, part of Quebec's most recent spurt in job growth is due to good 'ol politicking. Premier Jean Charest rushed to disburse a pay equity settlement with public sector workers smack dab during the March election campaign, putting $1.8-billion into the pockets of consumers, which has led to lineups at the cash register as women shoppers - the pay equity beneficiaries are all female - blow their windfall on kitchen renovations and summer outfits. Stores are hiring like crazy, offsetting the devastating impact of the near-parity CanBuck on export-dependent manufacturing jobs.
Still, the short-term boost from pay equity payouts doesn't account for the steadily shrinking unemployment gap between Canada's two biggest provinces. That phenomenon is decades in the making.
So what's behind it? The short answer is education. Four decades ago, fewer than half of working age Quebeckers had a high school diploma. Today, post-Quiet Revolution Quebeckers are among the best educated Canadians. In fact, in 2006, fully 69 per cent of Quebeckers between the ages of 25 and 44 had either a college or university degree, compared with 65 per cent of Ontarians, according to recent study by Université du Québec à Montréal economist Pierre Fortin.
The impact of higher education levels is borne out in the employment rate, or the percentage of Quebeckers of working age who have jobs. It stood at an all-time high of 61.1 per cent in June, within striking distance of Ontario's rate of 63.5 per cent.
Prof. Fortin notes that the employment rate among those between 25 and 54 - the age group that covers those who've finished schooling but haven't yet been tempted by early retirement - has actually converged in the two provinces, at about 80 per cent.
An aging population promises an even tighter labour market in Quebec in coming years, as the number of people entering the work force falls below the number leaving it. Eventually, though, demographic decline - and the slower economic growth it entails - could cancel out many of the gains Quebec's job market has made in recent years.
Still, there's no denying Quebec's labour market its due: It's come a long way, bébé.
kyakabuski@globeandmail.com
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