ECONOMIC BAD NEWS?
We have received some bad economic news, lately. I suggest that we look behind the headlines however to evaluate the degree of trouble we are in.
The first bit of news is that Canada’s financial growth is slowing significantly. Part of the reason for this slowed growth is the anticipation that the housing market will re-adjust downward in the near future. In reality, however, much of the slow-down is due to reduced Canadian domestic spending. Canadians have been advised, however, to reduce their spending and use their wealth to reduce personal debt. The slowed growth may be the inevitable result of Canadians doing what is requested of them.
The second bit of news is that the Region of Waterloo’s unemployment rate has jumped to 8%. When one reads behinds the headlines, however, we see that most of the job loss is with the very young (17 and 18 year-olds) and the private sector.
I am not denigrating the frustration and worry to young people caused by unemployment.
I remember trying to find a job when I was a young man. It is stressful and discouraging. That being said, I would prefer that the job losses are with the very young than with people who have child care expenses or are trying to save for retirement.
As stated above, the other sector that is suffering job loss is the public sector. I acknowledge and accept that the public sector is important. It should be noted, however, that up until now the majority of Canada’s job growth took place in the public sector. While I agree that the government needed to “prime the pump” there is a time when the government needs to readjust Canada’s private-public job creation mix if it is to claim being austere. If the public sector becomes too large, it will make Canada less attractive to investment.
Something else hidden in the newspaper articles is that the private sector, in general, is experiencing job growth. I suggest that these economic trends are the inevitable result of Canadians making the hard choices to ensure that it remains a competitive country. I am only saddened that the consequences of these choices are disproportionately placed on the backs of the unemployed.