(AlbertaIndex, July 9, Wednesday) --- The latest Employment Outlook 2008 report by the Organization for Economic Cooperation and Development (OECD) delivered an overall positive picture for the Canadian labour market tempered by a “moderate” rise in unemployment for 2009.

       It said unemployment will rise as a result of slower economic growth and tight credit conditions brought on by the impact of the US subprime crisis.

But countering this piece of sobering news, the Employment Outlook 2008 report said the Canadian labour market “should be less adversely affected” compared with the US. It projects that the two countries will have roughly the same unemployment rate in 2009, ending a long period in which the Canadian unemployment rate exceeded the American rate.

The report highlights a bright spot in Canada’s labour market:

“The share of the adult population working is at a historic high. At 74% of the adult population, the Canadian employment rate substantially exceeds the OECD average of 67%, up nearly 3 percentage points since 2000. The Canadian employment rate is now nearly 2 percentage points higher than that in the US.”

The OECD estimates indicate that Canadian wages in 2006 were nearly one-quarter lower than American wages in terms of purchasing power parities. However, that gap would have narrowed significantly in 2007 given the sharp appreciation of the loonie to about parity with the greenback, and the strength of hiring in western Canada, in particular, Alberta.

The report also noted the ease with which school leavers are finding employment in Canada compared with other developed economies.

“A flexible labour market makes the transition from school to work relatively easy in Canada. The recent performance of the youth labour market in Canada is very good compared with most other OECD countries. Sustained economic growth and a very flexible labour market by international standards have contributed to rising employment rates and falling overall unemployment for all, including youth,” it said.

The report said that Canada combines a high youth employment rate with the second highest rate of higher education completion in the OECD. One factor accounting for high youth employment rate in Canada is that it is quite common for students to hold part-time jobs. This pattern may also ease the transition from study to full-time work in Canada, since youth typically gain some familiarity with the world of work while still in school.

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