Monday, December 06, 2004

Economy good enough to be good news for Campbell

VICTORIA - It was a lot of economic good news for the Liberals in one day.
First StatsCan reported that B.C.'s unemployment rate had hit its lowest level in 23 years.
And then the panel of independent economists that advises Finance Minister Gary Collins predicted that B.C.'s economic growth for the next five years would likely be better than the Canadian average. Not spectacular growth, but welcome, especially in light of the huge risks posed by rising oil prices and the collapsing U.S. dollar.
The unemployment news is mostly symbolic. They November drop in the unemployment rate to 6.4 per cent meant good headlines for the Liberals, but it didn't really reflect a stronger economy or help for B.C.'s hardest hit regions.
The unemployment number didn't go down because more people got jobs. Instead, it fell because a large number of the people who had been looking gave up.
StatsCan gets the unemployment rate by calculating the number of people without jobs as a percentage of those who are working or actively looking. If people quit looking the pool is smaller, and the rate goes down.
In November about 23,000 fewer people had full-time jobs than in October; about the same number got part-time jobs; total employment stayed the same.
But about 11,000 people quit looking for work, pushing down the jobless rate.
StatsCan doesn't track the reasons for the drop in people in the labour force. People get discouraged, go back to school, move to Alberta.
The end result is the same. The unemployment rate goes down, but the number of people working actually stays the same. The total they are earning - and spending in the local economy - may even drop, if part-time work replaces full-time jobs.
The trend should be a special concern for the province's regions. It's may sound encouraging that no region of the province had double-digit unemployment last month. But if the reason is that people have given up and moved away, it's much less positive.
Still, the employment trend since the election has been positive, despite some terrific blows to the economy. About 2.1 million people were working in November, up 150,000 from the time the Liberals were elected. (The economy produced a little over 100,000 jobs in the comparable period at the end of the NDP era.) Debate wage levels and part-time work if you like, but more jobs is a good thing.
The report from the province's Independent Economic Forecast Council was more solidly encouraging. The council - 13 independent economists from the private sector - was set up to ensure the province's budgets are based on realistic projections. Their latest update predicts B.C. will outperform the Canadian economy in all but one of the next five years.
It's not soaring growth. The council predicts GDP growth of 3.3 per cent next year, a slight decline from this year. But B.C.'s economy will grow faster than the Canadian average, which the economists project at three per cent.
They predict B.C. will match the national average in 2006, with three-per-cent growth., and then stay slightly ahead of Canadian average through 2009.
Boom times its not; the annual growth rate for the period is only slightly better than the growth during the five years of the Clark government.
But the B.C. economy was better than the Canadian average only once during the Clark years; it's predicted to consistently beat that target ove the next five years. And most other things being in balance, that is good news for British Columbians.
It's impossible to know how much governments deserve credit for good times, or blame for bad times. The Liberals' critics will claim that they're simply the beneficiaries of a booming world economy, low interest rates and high commodity prices.
But those same critics have been bashing the government for being too pro-business. Surely they have to concede that some of that pro-business approach may be attracting investment.
Footnote: Politically, the economy only matters when things turn really bad, because voters are unsure how much of a difference government makes. The Mustel Group tracks the top issues on voters' minds in its polling. Only one in six voters pick the economy as the top issue, with health care the dominant top choice.

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