When it comes to analyzing government statistics, it’s essential to look beyond the headline numbers. Nowhere is that more important than the moment everyone in the media is reporting the unemployment rate and the state of the job market without going into the back story.
As the media has reported, the recent unemployment stats looked good. 15,300 jobs were added in February, and the unemployment rate fell to 6.6%.
That’s what the government wants you to pay attention to.
However, two numbers that received far less attention show there is a big problem in our economy:
- Wages were only up 1.3%, which is negligible when you consider the increasing cost of living. The trend since the 2008 crisis has been closer to 2.6%, meaning wage growth is slowing year-over-year.
- Hours worked went down by 0.3% year-over-year.
Those two numbers are measured over a 365-day range, meaning they have much more importance than the monthly stats (which are often heavily revised later). That’s why the government wants you to focus month-to-month, rather than look at longer term trends.
Weak wage growth and fewer hours worked points to a weakness at the very core of our economy. This weakness is being caused by over-taxation and a lack of confidence in the future direction of our economy. Because any advanced economy relies so heavily on consumer spending along with investment and risk taking by entrepreneurs and business leaders, a lack of confidence can weaken an economy over time. It can even lead to a recession.
That’s why the headline stats sound more and more empty to people. Each of us knows something is wrong with the economy. We see it in our own lives and the lives of those around us. We see people working harder and earning less. We see people with two or even three jobs, still just barely keeping their head above water. And on top of all that, we see the taxes and fees that keep adding up. It’s hard to feel confident about the future of our economy when consumers are burdened more and more by the government.
As people fight just to maintain their position, higher costs cause people to delay purchases, take fewer business risks, and stick with a more complacent, status-quo mindset. An economy can never boom under those circumstances.
To fully unleash our economy, we will need policies that remove the boot of government from the necks of our consumers and businesses. We will need to restore confidence that Canada is a great place to do business. Until then, expect Canada’s long-term economic trends to grow more and more concerning.
The government won’t tell you this. That’s why we need to make sure the message gets out.
Photo – Twitter