Good news on the job front?

On Friday, Statistics Canada announced that 108,700 jobs were created in April 2010. Newspapers were almost breathless in their rush to declare this as good news for the economy and a sure sign that our recovery is stronger than anyone anticipated, complete with the requisite quotes about stimulus being unnecessary and speculation about interest rate hikes.

What I didn’t see, however, was any coverage that went beyond the headline. Yes, 108,700 new jobs are good news. But Friday’s report also contained some troubling details.

Of these new jobs, 64,800 are part-time, compared to 43,800 full-time. In fact, this continues the trend of an increasing proportion of part-time work caused by the recession. Between October 2008 and August 2009, 486,000 full-time jobs were lost while part-time jobs actually increased by 99,000. Since then, the situation has evened out slightly with 37,000 part-time jobs and 220,800 full-time jobs created. However, this still leaves a deficit of 265,200 full-time jobs lost by the recession.

In fact, the “real unemployment” rate, which includes the hours not worked by those who are working part-time involuntarily, remained high in April at 11.8%.

While those whose Employment Insurance benefits have expired are probably grateful for any work that keeps them from needing to turn to welfare, it is very difficult to make ends meet on part-time work in Canada. In April, the average part-time wage was $15.60 an hour, compared to $24.16 an hour for the average full-time wage. Because part-timers also work fewer hours, this creates an even greater gap in take-home pay: average weekly earnings for part-time workers were $353.82 in April, compared to $982.73 for full-time workers.

Equally problematic, nearly half of the jobs created were in the service sector – retail and wholesale trade, information, culture and recreation accounted for 52,000 new jobs. These sectors have low average wages, meaning that even if someone has found full-time work they may be making significantly lower wages than they were prior to the recession. Manufacturing, which tends to have higher average wages, actually lost 20,600 jobs.

Finally, unemployment barely budged in April despite the unexpected number of jobs created. National unemployment was down by only 16,800 jobs, bringing the unemployment rate from 8.2% to 8.1%. Nearly 1.5 million Canadians remain unemployed.

Unemployment takes much longer to improve than employment because of growth in the labour force. This growth comes as a result of discouraged workers – those who had stopped looking for work because the economy was so bad – resuming the search for employment as well as normal population growth. As a result, we need more than the replacement of jobs lost during the recession in order to significantly impact unemployment. After the last recession, it took nearly 8 years for the unemployment rate to return to its pre-recession rate.

Two provinces – Nova Scotia and Saskatchewan – actually saw unemployment increase in April. Two of the provinces hardest hit by the recession, Ontario and Alberta, saw little change on the unemployment front with Ontario’s unemployment rate staying the same despite a gain in jobs and Alberta’s unemployment rate edging down from 7.5% to 7.4%.

These “pesky details” certainly temper the optimism offered by April’s job numbers. They also demonstrate that it is too early to take recovery for granted. We still need the economic stimulus package and we still need job creation. Without concerted effort, it could take years for the unemployment rate to return to its 2008 level.