Unemployment in the Yukon hit its highest level in five years this summer as the global financial crisis rippled across the economy, with 7.7 per cent of those wanting to work unable to find a job in June, according to Yukon government statistics.
The unemployment rate is a closely watched statistic, because besides being an index of social suffering it also has big implications for consumer spending (and therefore corporate profits and the stock market), government finances, and any elections we might be having this fall.
Translating the latest figures into human terms, about 1,400 Yukoners are facing the stresses and financial challenges of unemployment during the deepest economic downturn since the Great Depression of the 1930s.
The impact has been especially severe for the self-employed. Five hundred fewer Yukoners are running their own businesses than in July 2007, just before the crisis hit. That’s a punishing drop of almost 20 per cent. Many of those still in business have likely seen their incomes go down as clients become more careful with their cash.
Youth have also been hard hit, especially young men. About one young man in five between the ages of 15 and 25 is unemployed. The Yukon government does not break out employment statistics for immigrants or First Nations, but there are indications that unemployment among these Yukoners is high too.
It won’t be much consolation to those seeking work, but the Yukon’s unemployment remains relatively low compared to other regions and previous recessions. Seven provinces and Nunavut have higher jobless rates, including Newfoundland at over 17 per cent. Eighteen American metropolitan areas have unemployment over 15 per cent, from El Centro in Southern California at 27.5 per cent to five regions in Michigan ranging from 15 per cent to 20 per cent - hard hit by the auto sector collapse.
And despite the job losses, our current unemployment rate is still lower than the 13.6 per cent level it reached in July 2001.
The big factor in cushioning the blow has been that our four levels of government have hired around 600 Yukoners in the last two years. Without these hires, our unemployment rate would be around 11 per cent.
So what do the coming months hold for us?
The good news is that the July figures were slightly better than those in June on a seasonally adjusted basis. In addition, Fort Smith, NWT native Mark Carney, governor of the Bank of Canada, announced in July that the recession was likely over. We have to emphasize the word “likely,” since there are still many downside risks to economic recovery. Large corporate and credit card loan losses lurk in the future for the struggling global banking sector, and consumer and business confidence remain shaky.
Even worse, while a return to modest economic growth would technically end the recession, it would not automatically mean immediate job creation. Many economic pundits predict a “jobless recovery.” Companies may ramp up production enough to register in the statistics, but not enough to need to call back the workers laid off during the panic.
Another reason why job creation may lag is that we are not living through a “normal” cyclical recession. Some industries may never bounce back. There may never again be as many automotive jobs in Michigan - or condo construction jobs in Florida - as there were in 2007. In Yukon we are fortunate not to have any industries devastated to the extent of the auto sector, but some in the tourism business are worried that a recovery in Yukon visitor numbers may take a long time. This will affect hiring, of course.
So Yukon unemployment is painfully high and, although not as bad as elsewhere, or even during previous recessions here, it looks like it might be here to stay.
Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels. His latest book Game On Yukon! was just launched.