Gaining government and losing jobs
The picture painted by a jobs report that shows a gain only looks rosy until you take off the rose coloured glasses.
The June jobs report had Stats Canada reporting a gain of 7,300 jobs. That isn't many, but it was reported as a gain; a move in the right direction.
But consider that deeper into the report we learn that the public sector added 38,900 jobs while the private sector lost 26,000 jobs. Every one of those public sector jobs has to paid for by private sector jobs, and it obviuosly isn't a one to one ratio.
The report also reveals that 16,800 people dropped out of the labour force. That improves the unemployment rate, but not the number of people working. Damn statistics.
I continue to warn of the danger of growing government at a greater rate than growth in the private sector and I wonder when enough of the public will take heed.
Economist Thomas Sowell had a great column in the Sunday Toronto Sun explaining how governments report job gains and jobs saved, but ignore the cost of those programs.
"Back during the 1980s, when there were huge losses of jobs in the steel industry, the government restricted the importation of foreign steel. It has been estimated that this saved 5,000 jobs in the American steel industry.
But of course restriction of competition from lower-priced imported steel made steel more expensive to American producers of products containing steel. Therefore the price of these products rose, making them less in demand at these higher prices, causing losses of sales at home and in the world market.
The bottom line is that, while 5,000 jobs were saved in the American steel industry, 26,000 jobs were lost in American industries that produced products made of steel. On net balance, the country lost jobs by restricting the importation of steel."
Read Sowell's column here.