Labour markets are affected by the delicate balance between job growth and population growth.
Job prospects don’t really improve unless the economy adds more jobs than the population adds more job seekers. Labour markets in the U.S., Canada and Alberta are all experiencing their own unique dynamics at the moment.
In the U.S., the Congressional Budget Office (CBO) estimates that America’s labour force tends to increase at a rate of 0.7% annually. That means roughly 90,000 new jobs are needed each month for the unemployment rate to drop, a threshold which has only been surpassed 10 times in the past four years.
Estimates of labour force growth for any country depends on participation rates, fertility/mortality and immigration levels.
Participation rates refer to the tendency of people of a certain age to be working or looking for work, as opposed to retiring, continuing education, or staying at home, and it tends to rise or fall slightly depending on the strength of labour demand.
Canada’s fertility rate is lower than that of the United States (1.6 vs. 2.1), while the relative level of legal immigration is slightly more than twice as high.
Because of interprovincial migration, Alberta’s labour market dynamics are slightly more complicated.
Just looking at youth employment numbers, however, it’s clear that there will be some over-supply of young workers.
The lower youth employment levels lately is largely due to lower participation rates as pursuing education becomes more attractive, and having to compete with more experienced older workers makes finding work more difficult.
Will Van’t Veld