That many Canadians have lost their jobs as a result of COVID-19 is undeniable – but how many people have been affected, and who are they?
Professor Mikal Skuterud explains monthly labour statistics during the pandemic.
What is missing from the data that would be helpful for policymakers, and why is it important?
The biggest shortcoming of the data isn’t what’s missing, but rather what’s being made available for researchers to analyze. Under normal conditions, researchers access confidential data files, like the Labour Force Survey (LFS), through Data Centers operated by Statistics Canada. With these centers being closed, we must now analyze public-use data files which contain less information.
What are the pros and cons of the $2000/month CERB for Canadian workers?
The pro of an emergency income support program like the CERB is that it quickly gets money into the hands of families that have been adversely affected by COVID-19 induced job losses. This is critical for helping families get through this pandemic, as well as to limit the adverse impact of job losses on consumer spending, which can exacerbate the economic shock.
The con of the CERB is that in order to get the money out to lots of people fast, the government is putting little effort into screening whether recipients meet all the eligibility benefits. There is a concern that giving out “free money” is distorting workers’ incentives to work. These kinds of work incentive effects are always a challenge in designing income support programs; this isn’t an argument for not having these programs.
What trends can we expect to see in future survey data?
Without question, the April jobs numbers will look worse than the March numbers did. The question is how much worse. As of April 28, 7.26 million Canadians had applied for CERB support. The key eligibility criterion for CERB is job loss caused by the COVID-19 pandemic. There were roughly 18 million employed Canadians mid-February, before workplaces closed. That suggests that close to one-half of all Canadian workers lost their jobs within a 4-week period. That is a far bigger economic shock than Canada has ever seen, at least since we started collecting data.
The critical question now is how we’re going to come out of this. Many people like to think of labour markets like a game of musical chairs, in which we are competing for scarce empty chairs, and unemployment are the folks who didn’t find a chair. But that, by and large, isn’t what happens.
In thinking about coming out of this pandemic, there is a risk in thinking that the government turned the music off, and we’ll all quickly return to our chairs once they turn the music back on. This economic shock will have all kinds of effects on workers’ and employers’ decisions going forward as they adjust to a world with COVID-19. These adjustments will have long-term impacts on the number of empty chairs, the number of people looking for chairs, and even how fast the music is playing.
The University of Waterloo has a number of experts available for comment on various aspects of the COVID-19 pandemic, click here to see the up-to-date list.
