The new normal in labour markets

It seems economists are befuddled as to why we can have high unemployment and rising wages.   This doesn’t fit the standard models – weak labour markets = less upward pressure on wages.

What amazes me is that we can have a discussion with multiple economists and labour market types and the following data is not mentioned.  A main reason New Brunswick has upward pressure on wages and a weak labour market is that a large segment of the population is not really interested in work (at least year round).  There were 109,000 persons in NB that collected EI income in 2009 and 396,000 that earned wages/salaries/commission income.  The ratio of EI collectors to wage income earners in Moncton and SJ was about the same as the rest of Canada.   Back those two areas out and for every wage/salary earner there is one EI collector (one in three) – this is 85,000 people* collecting EI outside of SJ and Moncton.

We don’t have the Freddy Beach data but it is likely lower than Moncton and Saint John which could push this ratio in the rest of NB to 40 percent or higher.

If the economists actually asked employers in rural and smaller communities in NB they would hear this story.  There is a large segment that won’t work year round.  Now there is one caveat here – as was sternly pointed out to me recently – if this cohort (the 85k) was offered $20/hour or more many would likely switch to year round work.

*Please note that a few thousand of these would be parental leave.

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3 Responses to The new normal in labour markets

  1. Frederic S Gionet says:

    That’s one big caveat…pay people a decent wage and they will be more inclined to work full-time. It does however further emphasize the reality of the ural-urban divide within NB (and Atlantic Canada).

  2. Paul says:

    I wonder if David you take into account how much the Provincial Government uses the EI system to pay employees. hundreds, if not thousands of public unionized employees who collect EI benefits in the summer. I speak about Bus drivers, Teacher’s Assistance, Librarians….etc etc, all who file and collect EI over the summer. These people are full time employees….but use EI.

    I also wonder if you took public service jobs, which are generally concentrated in Southern New Brunswick impact your theory.

    To me your post is evidence that you have a theory and found the stats to back it up. (Basically a pre-conceived idea, then find isolated numbers which support the idea.

    I don’t know where you get this idea that there is a large population that doesn’t want to work full time. It is my experience that the private sector abuses the EI system to the degree that encourages.

    ” There is a large segment that won’t work year round.” Define large.

    What research method did you use to determine that people “won’t work full time”.

    This post clearly shows to me that you really have very little knowledge of Northern New Brunswick and its history.

    Is this David Campbell or fox news perpetuating myths using statistics to give it the air of credibility?

  3. It’s amazing how many people these days resort to name calling and insults when they don’t like something they read. We have a large segment of the population that has become acclimated to seasonal work and it would take a big wage boost to move them to full time work. I have talked to officials in the government and they tell me the same thing. I have talked with numerous employers and they tell me the same thing (and by the way this is not just northern NB). We can ignore this issue – or throw insults at people who raise it – or we can talk about it.

    Reread my post and tell me where I use the term ‘northern NB’?

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