a decrease in unemployment! happy days again?

December's unemployment stats are for Alberta are here . Last month the rate was 7.4% and this month we saw a decrease to (drumroll please) 6.7%. Nationally, the job picture was flat, with half the provinces showing an increase in unemployment and the other half showing a decrease.

I think these stats are showing the establishment of the status quo. We need a few more months to really see it, but I think this 'recovery' that everyone is talking about is just leveling off from the correction we saw last year. The bubble of the boom couldn't sustain itself, it popped and now we're seeing more realistic growth.

Another piece of evidence is in the tax assessments. Last year, my basement condo on the Avenue of Nations in Edmonton was assessed at 190,000+. This year, my assessment is now 30,000 less. Now, I'm fixing up my unit to make it more palatable, but the new assessment is definitely more realistic than last year. I am of course hoping to sell for more, but right now, I might just need to wait and see if demand starts to pick up.

We really need a few more months to really see where our economy is going, but I think the evidence is continuing to point to a new status quo (as I've mentioned several times).

November surprise?

November's labour stats are out. A slight decrease in the rate pretty much across the board. There were 13,000 jobs added this month in Alberta and 79,000 added nationally, mostly in the service sector.

Apparently some economists expressed surprise at this increase. Personally, I just think it's compensating for last month's drop. As I said last month, I expect that these increases and decreases will be our reality for quite some time. So the numbers didn't surprise me. As long as natural gas prices remain low and oil is (relatively) stable, then this is Alberta's reality.

So I really don't have much more to say for now about employment stats. Can you believe that the first decade of this millennium is almost over? 10 years went fast. So I want to take a few posts and look at Alberta's labour market over the past decade. By looking over the past we may be able to pick out some trends for the future. My primary source is going to be Stats Canada, but if my readers (oh so many of you!) can suggest other sources for me to use, I'll certainly be willing to take a look. As we near the Christmas season and the end of the year, I want to thank everyone in advance for reading my blog and I hope to continue this for some time.

establishing the new status quo

The latest unemployment stats came out on Friday. These stats track the unemployment rate in through this country. Canada saw an increase of .2% to 8.6%. Alberta saw a change from 7.1% to 7.5%. CBC was saying that this increase was unexpected given the previous two months saw decreases in the unemployment rate.

There is a lot of debate as to whether or not we are on the road to recovery or the worst is yet to come. Personally, I think we're seeing the establishment of the new status quo. It's still a little too early to see it graphically, but I think we're seeing an evening out of the unemployment rate in both Alberta and Canada. We're not going to see much more in the way of increases, but I don't think we'll see any dramatic decreases either. Alberta seems to be staying around 7.0% while Canada is going to remain around 8.5%. As with any monthly statistics, there well be ebbs and flows (as we did this month), but I think for the next while, we'll see things remain around this level.

So what does this look like? This is going to be particularly hard for Albertans to adjust to I think. We got so used to (in such a short time I might add) to jobs being a dime a dozen, that now that the job market is much tighter, Albertans don't know what to do when they have trouble finding work. Employment and unemployment is going to cyclical for many people, particularly for those with lower levels of education. Alberta has always had a high drop out rate. Kids did the bare minimum in school and then quit because they could make $18 an hour (or higher) on the rigs and other such occupations. With rig jobs much more competitive, those that did drop out (or did graduate but didn't go on to any other post-secondary) are going to find the jobs now available pay much less than what they expect them to.

This is also going to affect professionals though, be it engineers or trades people, especially those tied to natural resources and construction. Professionals are going to have to adjust and prepare for the cyclical nature of their work. This may mean buying a cheaper vehicle or downsizing their homes to make sure they can make their bills during a layoff period. They will have to stop buying so much on credit.

I have several other concerns. TFW's were brought in during the boom to fill labour shortages, typically in the food and hospitality sectors where Canadians would not work in favour of higher paying jobs. Employers have become addicted to these workers as they do a better job and take the position much more seriously than a born Canadian ever did. But the problem is that there are a lot of Canadians unemployed and we need to make sure that they get jobs first, even if it is for $9/hr.

We need to make sure our education policy is balanced and we educate an equal portion of tradespeople, technical personnel and University graduates. Boom times may not return soon but we still need to make sure we have a balanced labour market.

People are still going to have jobs. It's just that jobs will be harder to find. Government services will need to realign to help Albertans find these jobs and make sure Albertans are prepared for the job search. We also have to remember that we have an aging population, and some people will retire, but some won't. We are going to need replacements for these workers, particularly in the professional fields. So we need a robust and responsive immigration system. One that focuses on bringing new people with the skills we need.

I still see a lot of people expecting us to climb out of this 'recession' and return in a year or two to glory days of the boom. This is unrealistic. Instead, we need to adapt and expect that higher unemployment rates are not an aberration. It is certainly something to work on lowering, but it is unrealistic to expect that we'll return to unemployment rates like 3.5%. Besides, even those who were making big money during the boom had to admit - the boom was unsustainable. Now is the time to correct the problems we saw manifest themselves and prepare our structures to become more responsive to the ebbs and flows of the labour market.

September's labour stats

The Alberta unemployment rate finally came down, after 11 months of increase. For the Alberta perspective, go here. It wasn't a large decrease and it happened for 2 reasons - a slight increase in jobs and a decrease in Alberta's working population. Last month the unemployment rate was 7.4%, this month it is 7.1%.

I was hoping that the rate would start going down before now. This rate would indicate that the economy is not really getting worse, but it's not getting any better. I really think we've hit a plateau and this is where we are going to be for a while - maybe even a few years.

The bulk of Alberta's natural resource activity is actually in natural gas. And the price for natural gas is depressed right now. I anticipate that the oil sands are going to see some construction for the next few years, but it won't be at a frantic pace like it was 2 years ago. This will allow for some job creation (in construction) but it will be slower than before. With prices still low in natural gas we won't see as much activity in the gas sector for a while.

The economists are calling our labour market 'balanced'. I agree with this. It's harder for people to find work but it's still possible for those who have the skills and keep their expectations realistic. A high school drop out is going to have trouble making over $15/hour. Someone with just high school really needs to be flexible and should really look at further training. And individuals who are looking for training should look at keep their education general, as specialization may paint one into a corner if a particular company no longer needs that set of skills. Specialization is often inevitable, but if one has to specialize, specialize in more than one thing.

Alberta is still a great place. We'll have some challenges ahead of us, but I think these challenges are no worse than what we saw in the early 90's. For me, I just think it's important not to get too arrogant and keep things in perspective. We're always going to need oil and gas, but we need to keep it sustainable. This is an opportunity for Alberta to slow down and take stock make some appropriate investments. Then these investments will pay off in a few years when the economy starts to pick up again.

mmm labour stats

The latest labour force statistics (better known as the unemployment rate) for May came out yesterday. Check them here. Both Canada and Alberta saw very small increase in the unemployment rate in May, which is really no surprise. The stats for May confirm what I've been thinking about for 3 months now. The Alberta economy has finished its correction and the new status quo is taking hold.

Gone are the days where a kid can drop out of school and land a $25 job playing in the mud. Gone are the days that if your employer wasn't paying you enough you just went next door for an extra 2 bucks an hour. Gone are the days of quitting your job on Friday and having a new one Monday morning.

The new reality is that we need workers with skills and education. If you're not pulling your weight at the job, you may find yourself looking for a new one. Employers are not looking for workers who just have a pulse, they're looking for workers who will do the best they can for the business.

The downturn did hurt a lot of people. But it could have been a lot worse. People still have jobs and Alberta still has the largest labour participation rate in Canada. People are still buying Wal-mart, going out for dinner at The Keg and having fun at Rundle Park. Some people say the worst is still to come. Myself, I think what we just saw was a correction. We couldn't sustain the boom we saw from 2004 to 2008. But the world still needs fossil fuels. And Alberta still has them.

What puts Alberta in a tough position is that we're still getting a lot of inter-provincial migrants who think that just anyone can come and secure a good paying job here. But the thing is that there is a lot less demand for lower skilled positions now. If you want a job as a heavy equipment operator you need to get in line with 30 other guys applying for the same position. Don't have any experience working on the rigs? Well, there are lots of guys applying for those jobs who DO have the experience. There are still plenty of jobs in the service sector though, but they are expecting that you'll stick around for more than 2 weeks. If they don't think you will, don't expect a call back.

I foresee that Alberta could stay at this plateau for a number of years. If oil prices remain around $60 bucks a barrel, the companies will still be working, but working less. This isn't a bad thing. The break neck pace of the last 4 years was ridiculous. Instead, let the economy develop in a sustainable fashion. Instead of 4 2-3000 person construction projects happening at one time, lets have one. Once that project is done, move onto the next one. This allows Alberta to fulfill its labour obligations and still develop its economy. It also keeps the kids that should be in school, in school. It ensures that drunk people aren't driving 5 story heavy haulers. And it keeps the line up at Tim Hortons manageable.