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May 8, 2020

Behind the headlines: what April’s jobs numbers mean for Albertans

On May 8th, Statistics Canada published labour force numbers for the month of April. This release marks the first relatively complete picture of the impact of the economic shutdown on jobs and unemployment across Canada.

Last month, we only got a partial view of that picture. Labour Force Survey (LFS) data is collected in the third week of the month which, in March, was right about the time that the shutdown was starting in earnest; businesses were just starting to close up or scale back operations, and layoffs and employee furloughs were just beginning.

READ MORE: First look at COVID-19 jobs numbers: Bad data, worse reality

Even then, headline numbers were bad: the Alberta economy had lost 117,000 jobs while across Canada, the total exceeded 1.0 million. Canada’s unemployment rate jumped from 5.6% to 7.8% while Alberta’s rose from 7.2% to 8.7%.

We knew at the time that the numbers for April would be worse. BCA’s economics team calculated that, based on the number of Employment Insurance (EI) and Canada Emergency Response Benefit (CERB) claims, the jobless rate in the province at the end of March was probably closer to 27%. That estimate turns out to have been very close to the truth. Alberta’s official unemployment rate in April was 13.4%, but when you include the people who gave up looking for work since February and the spike in those technically employed but working 0 hours, the jobless rate in the province was more like 28.6%.

Overview

Alberta lost 243,000 jobs in April, adding to the 117,000 that were lost in March. All told, employment levels have fallen by 15.5% since February, bringing the total number of jobs in the province down to its lowest level since January 2007. Job losses were heaviest in part-time positions. Since February, part-time employment has fallen by nearly 32% (61,300 jobs), while full-time employment dropped by 11.9% (182,500 jobs). 

As noted above, Alberta’s official unemployment rate jumped from 7.2% in February to 13.4% in April. However, to be counted as unemployed, a person has to be actively looking for work. Nearly 237,000 Albertans have given up looking for a job since the crisis hit and the number of people technically employed but who didn’t log any hours doubled. Including those people as ‘unemployed’ pushes the jobless rate up to 28.6%.

Provincial Comparisons

The impact of the economic shutdown on Alberta is roughly in line with what we see in other provinces. Across Canada, employment has dropped by about 15.7% since February (almost 3 million jobs), while Alberta saw a 15.5% decline.

Quebec has been the hardest-hit province as more stringent lockdown measures have contributed to an 18.7% decline in employment over the last two months.

Impact by Industry

In March, we reported that job losses were concentrated in precisely the services-sector industries one would expect: accommodation and food services; wholesale and retail trade; information, culture and recreation; and (non-essential) health care and social assistance. At the time, the impact had not yet been felt in goods-producing industries.

That changed in April, as employment in the goods sector plunged compared to March, with steep declines in construction, manufacturing and resource extraction. However, the steepest overall losses continued to be in the services sector. The most severe decline was in accommodation and food services, where employment has fallen by more than 50% since February.

Impact by Region

Impacts at the sub-provincial level are a little trickier to assess because of differences in how jobs numbers are calculated. It comes as no surprise that the bulk of job losses are concentrated in Alberta’s two largest cities. However, the impact was more severe in Edmonton than in Calgary; since February, we estimate that about 153,000 jobs have been lost in the former and 139,000 in the latter.

In terms of the impact on the local labour force, the steepest declines were in Edmonton and the Lethbridge-Medicine Hat area. Employment in the Edmonton area is down an estimated 19% since February and is 17% lower in southeastern Alberta.

Hours Worked and Wages

One surprising result from April’s labour force data is that while many Albertans have lost their jobs or have seen their hours fall to zero, those who are still actively working are not, in general, seeing a significant reduction in hours. In February, Albertans who did log time at work during the survey period worked an average of 37 hours. In April, that number only fell to 36 hours. Historically speaking, there is too much variation in work hours from one month to the next to be able to attribute this small decline to the economic shutdown.

However, layoffs and the spike in the number of Albertans working zero hours are having a devastating impact on incomes across the province. Albertans are losing about $530 million per week in labour income. Emergency income supports will only offset a fraction of that total.

Impact by Age and Gender

As we reported last month, young Albertans – and especially young women – are paying a heavy toll during the shutdown. While total employment across Alberta has fallen by 15.5% since February, nearly 45% of all women aged 15-24 have lost their jobs, along with 31% of young men.

While the impact is notably less severe for older workers, it continues to be women that are most affected as they are disproportionately represented in the industries most affected by the economic shutdown.

What does all this mean?

What makes this recession “unprecedented” is not just the scale of the impact but the fact that it was intentional; businesses were closed and people were asked to stay home in order to protect individual Albertans and to preserve our health care system.

Though the numbers are bad – and we cannot forget that each number represents an individual or family whose life has been upended – what matters most is how quickly and safely individuals are able to get back to work.

The good news is that April’s employment numbers are likely to be as bad as it will get. Many businesses will start hiring workers back in May as they get access to the federal wage subsidy; others will begin resuming operations as Alberta’s re-launch strategy gets underway. Albertans will start returning to work and we will see the unemployment rate drop.

We do know that the recovery will be gradual and its success will hinge on three things: clear rules and guidelines for how businesses must operate; public confidence that it is safe to go out and resume some normal activities; and Albertans continuing to act responsibly to limit the spread of the virus. The next few months will tell us more about how the recovery is going and what the future holds for Alberta.

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