Job creation is no longer a top priority

Stephen Gordon explains why focus should be on the quality of jobs, not the quantity

by Stephen Gordon

One of the strangest things about public debates about economic policy is how one-dimensional they are: almost every measure is viewed through the lens of job creation. This is puzzling, because most economic policy discussions aren’t about jobs. Proposals such as free trade, carbon taxes, GST/HST harmonization and changes to corporate tax rates are routinely discussed in terms of their effect on employment, but the actual effect of these measures on total employment is approximately zero. They may alter the composition of employment and wages, but not the level of total employment.

It’s not hard to come up with explanations for this preoccupation with employment growth. The labour force  grew extraordinarily rapidly the past few decades as the baby boom generation reached working age and as women’s participation rates increased. Finding jobs for all those new workers was, quite rightly, a high priority for policy.

Those days are over: women’s participation rates have leveled off (or will soon do so), and the recession ended four years ago. The problem will no longer be creating jobs for a fast-growing workforce, it will be figuring out how to generate high incomes as the share of the population that is of working age shrinks. This chart graphs the share of the population aged 15-64; the red and blue lines are the bounds of Statistics Canada’s population projection scenarios in Cansim Table 052-0005:

Population aging has already begun. The workers of the future will have little trouble finding jobs; the challenge will be to make sure that the jobs they find generate the most value.




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Job creation is no longer a top priority

  1. The effect of trade deals on unemployment rates is zero? Holy brain-dead economics! Let me guess – you went to U of Calgary?

    • I don’t want to put words in anyone’s mouth and i am no expert in the subject, but it seeming to me that “approximately zero” to (some?) economists means ‘over a long enough term there is no way to tell.’

      • Hard to imagine any legit economist making that claim though. Where does Maclean’s dig up these bozos?

  2. Job creation was never a top priority.

    • ???????????

      • When Harp first got in, he blew the huge rainy day surplus we had. Then he lowered the GST so less money came in. There was no thought of jobs.

        Even when a ‘stimulus’ was required….did we rebuild our infrastructure and create jobs? No.

        Even the things he promises….like military purchases….are quietly forgotten a few months later.

        There have been constant cutbacks….that’s all.

  3. This Conservative government has really been a tragedy for Canada. We have slipped in almost every ranking and the world no longer respects us in the upper echelons. The “bribe” which was supposed to make it all worth while, economic prosperity, never occurred, at least for the vast majority. A failed period of leadership in Canadian history. At least the next government will be able to make several easy, obvious common-sense choices that the Conservatives wouldn’t- such as easing our total dependence on the most destructive of oil sources, breaking from America’s drug and foreign policies (which we are now, unbelievably, further to the right of!), regulating business, and actually taking on white collar crime.

    • Actually, the Liberals kicked us off. Our war on the environment was thanks to them. And we became the the least innovative economy in the G7 under the Liberals as well. Our shameful rates of childhood poverty and inequality also happened under the Liberals, sadly.

  4. As if anyone any longer pays attention.

  5. it never been a top priority.

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