Weakening B.C. economy reflected when we look behind the latest job numbers – MLA Minute

Over the course of the last two years, the economy has showed signs of weakening.

One of the main indicators is the job market. Last week the jobs report for June was released and things are most certainly getting worse.

The recent report highlighted a troubling trend in British Columbia’s job market, revealing a loss of 10,000 positions in June. That alarming figure, combined with a decline in both the labour force and employment, underscores the urgent need for strategic action to stabilize and revitalize our economy.

According to the latest labour force statistics highlights, the unemployment rate in B.C. decreased to 5.2% in June, down 0.4% from May.

At first glance, that might seem like positive news. However, a closer examination reveals a more complex and concerning picture. The labour force shrank by 23,000 individuals, while employment decreased by 9,700. This paradoxical scenario, where the unemployment rate drops despite fewer jobs, is indicative of deeper systemic issues.

The decline in the participation rate to 64.6% reflects a growing number of individuals disengaging from the labour market. That could be due to various reasons, such as retirement, pursuing further education or discouragement from prolonged job searches. Regardless of the cause, the result is a shrinking pool of active workers, which poses significant challenges for our economy.

All this despite our population growth staying at unprecedented levels.

In sectors across the board we are seeing instability, including public services, where we are seeing job losses. The public sector shed 7,700 jobs, but more shocking was the number of self-employed individuals dropped by 6,900.

Even though the private sector added 5,000 jobs, it wasn’t enough to offset the overall decline. Full-time and part-time employment both saw reductions, further highlighting the precarious state of our job market. The tech sector took a huge hit, shedding 15,400 jobs. Health care saw 6,400 jobs lost.

Comparing B.C. to the national landscape, we see that while our unemployment rate is the second lowest in Canada, this is little comfort given the broader context.

Nationally, the unemployment rate increased, signalling B.C.’s challenges are part of a wider economic downturn. In contrast, Manitoba and Saskatchewan, despite having comparable unemployment rates, are not experiencing the same level of job losses.

One critical area that needs attention is private sector job creation, which has flatlined. As highlighted by the Business Council of British Columbia, the private sector is the primary engine of job growth and economic prosperity. However, recent trends show a worrying stagnation. Since the onset of the pandemic, private sector employment has struggled to regain its footing, leaving many workers and businesses in a state of uncertainty.

This situation demands a proactive and multi-faceted approach. Government must focus on policies that encourage job creation, particularly in high-growth industries such as technology, energy, manufacturing, and innovation. Investment in infrastructure and support for small businesses can also play a crucial role in driving economic recovery.

Additionally, we need to address the barriers that prevent people from participating in the labour force, whether through enhanced training programs, better childcare support, or incentives for older workers to remain engaged.

Moreover, the government must adopt a more transparent and responsive stance. It’s essential to engage with stakeholders, including businesses, community leaders and workers, to develop solutions that are both practical and forward-thinking. Our policies should not only aim to recover lost ground but also to build a more resilient and dynamic economy for the future.

Reviving private sector job creation should be a top priority. This can be achieved through tax incentives for businesses that invest in new technologies and training, as well as by reducing regulatory burdens that stifle innovation and growth. We should also explore opportunities to attract foreign investment and nurture homegrown startups, which can become significant job creators in their own right.

While the drop in the unemployment rate may appear as a silver lining, it masks the underlying issues plaguing B.C.’s job market. We cannot afford to be complacent. It’s time for bold and decisive action to ensure British Columbia emerges stronger and more prosperous in the face of these challenges. Our future depends on it.

My question to you is this:

What steps should be taken to grow back our private sector jobs?

I love hearing from you and read every email. Please email me at [email protected] or call my office at 250-712-3620.

Renee Merrifield is the BC United MLA Kelowna-Mission.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.