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A record drop in public sector jobs?

worker, public sector

Much was  made by the media and others in the chattering classes of the "record" drop in public sector employment reported in the July Labour Force survey by Statistics Canada last week.

So, are public sector workers facing a fall?

For Ontario, the figures show a drop of 23,600 in  public sector employment.  That's a drop of  1.7% compared to the previous month, certainly a significant one-month drop (although slightly less than the Canada-wide decline of 2%).

But shake a few grains of salt on this monthly data.  Over the last three years, the trend is no growth rather than decline.  Since August 2010, Ontario public sector employment has stayed flat, hovering around 1.34 million, sometimes up a percent or two, sometimes down.

The Labour Force figures can move about significantly on a month by month basis, even while the trend is flat.  In July 2011, public sector employment fell 22,800 over the previous month  but this did not signal a trend -- public sector employment continued along in the same 1.34 million area.

Indeed, public sector employment fell almost 30,000 in July 2007, but far from starting a trend downwards this only led to three years of strong growth in public sector employment --  right through the recession.

From August 2007 until August 2010, public sector employment increased 10%.  After that, growth in public sector employment petered out, even though there was significant economic growth over the next three years. (A similar trend is seen for Canada-wide public sector employment.)

So, one month does not a trend make. Certainly, however, the faith the provincial and federal governments have put in more and more public sector austerity means that we have to keep watching the trend.

Private Sector -- A  Different Story
Private sector employment was also down in July -- dropping 10,000.  But private sector employment in Ontario has done a little better over the last three years, going up 148,700.   Still that only amounts to a 3.5% private sector increase over three years, about the same as the increase in population.

But if you examine private sector job performance since the recession the picture is much worse.   From August 2007, private sector employment has only increased 53,600, a paltry increase of 1.2% over six years.

That is far less than population growth.  Bottom line: the private sector is not generating many new jobs for Ontario.  

Public sector employment, in contrast, has run ahead of population growth over the same period, increasing 13.4%.  

While private sector employment was hard hit during the recession, public sector employment grew significantly.  It was only some years after the recession officially ended in 2009 that things changed --  for the worse for public sector employment and, to a small extent, for the better for private sector employment.

Photo: The Night Shift by Stephen Poff


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