Why Unemployment Persists

In Canada, we count anyone holding a part-time minimum wage job as employed. But are laid-off engineers really employed when they are making $20,000 a year, either part-time or self-employed, when they were previously making $90,000? Should jobs paying below the poverty line be counted as real jobs?

Why is unemployment a problem? It is actually a simplified term for a very complex issue. Types of unemployment can include underemployment, misemployment, self-employment, seasonal employment, retraining, and unpaid mandatory vacations.

High rates of unemployment and underemployment create long-term social and economic problems, compromising our social safety net and all levels of government.

Canada’s unemployment rate in Canada has traditionally been higher than in Europe or the US for a number of reasons:

  • We have a higher proportion of seasonal industries
  • We have had a higher proportion of our population in smaller, more isolated communities, making jobs harder to match up with potential workers
  • Mass immigration has caused a surplus of workers

To address the problem of unemployment, the government focus has been to grow the economy at any cost , assuming that growth will cure everything. Yet it hasn’t. Not recently and not for 40 years.

As part of this growth strategy, the government has used mass immigration to supply endless cheap labour to employers like Tim Hortons, where labour costs account for between 25% and 40% of total expenses.

Yet there is something very wrong with this business model. Workers who make minimum wage cannot afford the basic costs of living; they rely on the social safety net of government assistance programs. Essentially that means that Canadian taxpayers are subsidizing this system, to the tune of about $4 per hour for every minimum wage job.

Less growth, higher employment

The unemployment issue should be dealt with by creating high-paying and productive jobs with low turnover. Then Canadians could live well, in an equalized society with a strong social safety net and balanced government finances.

There is no shortage of workers when a decent wage is involved. The shortage occurs when the company or the business model needs cheap labour in order to function. We don’t need more immigrants; we need more investment in our one natural resource which is under-developed: the Canadian people.

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