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Greetings! I am Matthew Columna Rivera, and I would like to welcome you to my wall. Through this medium, I would like you to learn about the relationship between economic growth and unemployment. How does economic growth affect the employment rate (and vise versa) of a certain country? What is Okun’s law and how is it used to investigate the statistical relationship between the growth rate of a country’s economy and its unemployment rate? How is Canada’s employment growth faring when compared with that of other countries and which province has the highest economic growth rate? What is employment-rich economic growth? You will learn about these things (and many more) through this wall.

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This video explains the relationship between economic growth and employment. According to this video, countries actively pursue economic growth to raise standards of living by creating more job opportunities and better jobs. It states that more labour will be needed as the economy grows to generate higher levels of output: more production, more labour. The opposite of that statement happens when the economy is in recession: less production, less labour. A recession, therefore, increases the rate of unemployment. Therefore, this video explains that economic growth and employment are positively related – one factor directly affects the other.

I chose this video because it summarizes the relationship between economic growth and employment. One piece of information that I found useful in this video is that the pace of the creation of jobs depends on which industry is driving the economic growth of the country.

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Global and national emergencies can trigger both unemployment and underemployment. This fact was made even more obvious when the COVID-19 pandemic hit. When the pandemic hit, many people either lost their jobs or had to settle for a job that is below their skill and education levels. The pandemic also caused prolonged unemployment, which robbed the economy of useful talents. (It can be said that the pandemic caused the economy to “freeze” for some time). Prolonged unemployment can also cause people to doubt and loss of hope (for example, families denying educational opportunities to their children because of the lack of income), which could negatively impact the economy in the future.

I chose this article because it explains how prolonged unemployment can negatively impact not only the economy, but also the country, individuals, and society. One important piece of information that I found useful in this article is that it is not always a good idea for people to withdraw money early from their retirement accounts, since they will be hit with penalty tax. It is better for people to take out a loan from their retirement accounts to avoid being hit with penalty taxes.

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While economists and academics make convincing arguments that a certain natural level of unemployment cannot be erased, elevated unemployment imposes high costs on the individual, society, and the country.

Worse yet, most of the costs are of the dead loss variety, where there are no offsetting gains to the costs that everyone must bear. Depending on how it's measured, the unemployment rate is open to interpretation. In addition, underemployment can be extremely detrimental to the economy of society as well. Unemployment numbers include people who are working at low-paying or low-skill jobs that do not provide enough full-time hours for benefits or enough to earn a living wage.

Global and national emergencies can trigger both unemployment and underemployment. For example, when the Covid-19 pandemic hit, it left more than 10 million Americans jobless in its first two weeks. The situation was so serious that the Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded unemployment benefits to self-employed and part-time workers through Pandemic Emergency Unemployment Assistance and provided up to 39 weeks of benefits beginning on or after Jan. 27, 2020, and ending on or before Dec. 31, 2020.

Key Takeaways

Costs to the Individual

The costs of unemployment to the individual are not hard to imagine. When a person loses their job, there is often an immediate impact on their standard of living. Before the Great Recession, the average savings rate in the U.S. had been drifting down toward zero (and sometimes below). There are anecdotal reports that the average person is only a few weeks away from serious financial trouble without a paying job.

Even those eligible for unemployment benefits and other forms of government assistance find it is not enough as these benefits often only replace 50% or less of their regular income. That means these people are consuming far less than usual. However, the economic consequences can go beyond just less consumption. Many people will turn to retirement savings in a pinch, and draining these savings has long-term ramifications.

Prolonged unemployment may lead to an erosion of skills, basically robbing the economy of otherwise useful talents. At the same time, the experience of unemployment (either direct or indirect) may alter how workers plan for their futures-prolonged unemployment can lead to greater skepticism and pessimism. On a similar note, the absence of income created by unemployment can force families to deny educational opportunities to their children and deprive the economy of those future skills.

Last but not least, there are other costs to the individual. Studies have shown that prolonged unemployment harms workers' mental health and can worsen physical health, and shorten lifespans.

Costs to Society

The social costs of unemployment are difficult to calculate but no less real. When unemployment becomes a pervasive problem, there are often increased calls for protectionism and severe restrictions on immigration.

Protectionism can not only lead to destructive tit-for-tat retaliation among countries but reductions in trade harm the economic well-being of all trading partners.

Other social costs include how people interact with each other. Studies have shown that times of elevated unemployment may correlate both with less volunteerism and higher crime.

Costs to the Country

The economic costs of unemployment are probably more obvious when viewed through the lens of the national checkbook. Unemployment may lead to higher payments from state and federal governments for unemployment benefits, food assistance, and Medicaid.

Unemployment is also a dangerous state for the U.S. economy. Almost 70% of what the U.S. economy produces goes to personal consumption and unemployed workers.

Even those receiving government support cannot spend at prior levels. The production of those workers leaves the economy, which reduces the gross domestic product (GDP) and moves the country away from the efficient allocation of its resources. For those who subscribe to Jean-Baptiste Say's theory that the production of goods creates its own demand, that is a serious issue.

It is also worth noting that companies pay a price for high unemployment as well. Unemployment benefits are financed largely by taxes assessed on businesses.

How Does a High Unemployment Rate Affect the Economy?

A high unemployment rate affects the economy in many ways. Unemployed people tend to spend less, may accrue more debt, and unemployment may lead to higher payments from state and federal governments for things like food stamps.

How Do I Get Unemployment Benefits?

You have to apply for unemployment benefits through your state. You can find your state's guidelines via the U.S. Department of Labor website, CareerOneStop. Some states will allow you to file a claim over the phone or online, other states make you file a claim in person. Make sure to have your contact information, like your social security number and information about your former employer on hand.

Should I Use My Retirement Savings if I Am Unemployed?

If you find your unemployment benefits running out or your benefits don't stretch enough to pay the bills, you could be tempted to pull money out of a retirement account. However, it isn't always the best idea. If you withdraw early, you will be hit with a 10% percent penalty tax, plus state and federal taxes, unless you meet certain eligibility requirements to waive the penalty tax. You could consider a loan from your retirement account, which does not incur penalities.

The Bottom Line

Governments worry about the consequences of inflation, but unemployment is likewise a serious issue. Apart from the social unrest and disgruntlement that unemployment can produce in the electorate, high unemployment can have a self-perpetuating negative impact on businesses and the country's economic health.

Worse still, some of the more pernicious effects of unemployment are subtle and long-lasting. Consumer and business confidence are key to economic recoveries, and workers must feel confident in their future to invest in developing the skills-and building the savings -that the economy needs to grow in the future. The unemployment costs go far beyond the accumulated sums handed out as unemployment insurance benefits.

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While economists and academics make convincing arguments that a certain natural level of unemployment cannot be erased, elevated unemployment imposes high costs on the individual, society, and the country. Worse yet, most of the costs are of the dead loss variety, where there are no offsetting gains to the costs that everyone must bear.

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Okun’s law is an economic observation created by Arthur Okun, who worked as an economic advisor to the late Lyndon B. Johnson. Using empirical data, Okun tried to find the approximate amount of real gross domestic product (RGDP) output lost for every percent of excessive cyclical unemployment experienced by the economy. Through his observation, Okun concluded that:

- The economy will experience a 2% decrease in RGDP output per 1% increase in cyclical unemployment.

- The economy will experience a 2% increase in RGDP output per 1% decrease in cyclical unemployment.

I chose this video because it gives a summary of Okun’s law. It explains how unemployment can negatively impact the economy. One piece of information that I found useful in this video is that Okun’s law only applies when an economy is experiencing an increase or decrease in cyclical unemployment.

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Website 2: A Decrease in Canada's Unemployment Rate

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Website 2: A Decrease in Canada's Unemployment Rate

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Canada’s unemployment rate decreased to its lowest level to date of 5.3% in March of 2022. This unemployment rate was lower than those seen before the COVID-19 pandemic and was the effect of the addition of Canada’s economy adding 73 000 new jobs. Furthermore, this decrease in the unemployment level led to an increase in wages, which is good not only for those who already have job but also for those looking for a job.

I chose this article because it shows how Canada’s economy performed before and during the pandemic. One important piece of information that I found useful in this article is that Canada has now more job openings than workers willing to do them. I also found it ironic that Canada’s unemployment rate decreased during instead of before the pandemic.

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Canada's economy added 73,000 jobs last month, a little less than economists were expecting but still enough to push the official jobless rate to 5.3 per cent, the lowest level seen on records dating back to 1976.

Statistics Canada reported Friday that both goods-producing industries and the service sector added jobs, but most of the gains were concentrated in Ontario and Quebec, which added 35,000 and 27,000 new jobs, respectively.

The jobless rate is now lower than it was before the pandemic, when it was as low as 5.4 per cent in May of 2019.

Employment has now surpassed the level it was at before the pandemic, and we've moved into a tight labour market where there are more job openings than workers willing to do them right now. That has employers facing a labour crunch like they've never seen.

Jennifer Burstein, a vice-president at Ontario-based construction firm Collecdev, says it's harder than it's ever been to find the right number and calibre of workers to do the work at the growing company.

"We have one position available at the moment that has been on the books for a month or so," she told CBC News in an interview.

She's had about three applicants for the job in that time period, "[but] this time four or five years ago, I would see 40 candidates come through for the same role."

After a lull earlier in the pandemic, the construction industry has roared back, adding jobs for four months in a row now.

The business is busy and growing, which puts added pressure on the current employees to meet that demand.

"Our employees are very dedicated to completing a project and getting the job done right," she said. "They're spread thin."

Wages being pushed up

The jobless rate may well go lower still, as employment growth has been outpacing population growth in Canada for more than half a year now, the data agency said. Since September 2021, Canada has added 463,000 new jobs, even as the population of working-aged people has only grown by 263,000.

That's a recipe for low joblessness, which is good news for anyone looking for work, but it's also good news for people who already have a job, since it will likely lead to higher wages, too.

The growing demand for workers has pushed up average wages by 3.4 per cent in the year up to March. That's about half the inflation rate, but if current trends in the job market continue, it follows that wages must go higher, too.

"Wages have only one way to go, with a record-low jobless rate and workers pay trailing well behind inflation ... and that's straight up," Bank of Montreal economist Doug Porter said.

Burstein says she sees that every day in her job, trying to find enough qualified candidates to do the job. "It's almost a bidding war of sorts on good quality employees," she said.

Jay Zhao-Murray, an analyst with foreign exchange firm Monex Canada, said the job number for March suggests wages are on a clear trajectory upwards.

"Wage growth is a lagging indicator of a tight labour market, and is therefore likely to rise in coming months," Zhao-Murray said.

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Canada's unemployment rate dropped to lowest level on record in March to 5.3% | CBC News

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Canada's economy added 73,000 jobs last month, a little less than economists were expecting but still enough to push the official jobless rate to 5.3 per cent, the lowest level seen on records dating back to 1976.

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Website 3: Employment-Rich Economic Growth

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Website 3: Employment-Rich Economic Growth

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Economic growth alone does not lead into the creation of more and better jobs, especially for those who are at an economic disadvantage. However, economic growth is a requirement for increasing productive employment and is the combined result of the increases in both employment and labour productivity. The International Labour Organization (ILO) and other organizations help counties achieve the goal of transforming economic growth into employment by advocating and promoting global policy frameworks and partnerships whose goal is generating more quality employment opportunities.

I chose this website because it shows how organizations such as the ILO can help countries improve their employment rates. In this article, I learned that economic growth will not always lead to more and better jobs.

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Economic growth alone does not necessarily translate into more and better jobs, especially for the poor, vulnerable and those at risk of being left behind. Economic growth is a prerequisite for increasing productive employment; it is the combined result of increases in employment and increases in labour productivity. Hence, the rate of economic growth sets the absolute ceiling within which growth in employment and growth in labour productivity can take place. However, the pattern or nature of growth matters, too. The impact of economic growth on productive employment creation depends not only on the rate of growth, but also on the efficiency by which growth translates into productive jobs. The latter depends on a range of factors, such as the sector composition of growth and the capital/labour intensity of growth within the individual sectors. There is usually a need to increase both the number of jobs and the productivity as well as incomes from employment. A review of economic development from an employment perspective should therefore assess to what extent economic growth has met the need for more jobs and for higher productivity/incomes. Such an assessment needs to be broken down by economic sectors to yield meaningful insights. The extent to which economic growth is associated with and driven by a productive transformation is of major importance to the sustainability of economic development in the medium and long term ( 19).

Indicators that measure the ability of an economy to generate sufficient employment opportunities for its population can provide valuable insights into the economy's overall development performance. These indicators include unemployment rates, employment-to-population ratios, labour force participation rates, and the employment intensity of growth or elasticity of employment with respect to output - this last indicator measures how much employment growth is associated with 1 percentage point of economic growth. The decline in the employment content of growth is a matter of policy concern. Explicitly integrating employment and decent work into economic growth and poverty reduction policies helps to maximize the benefits for people and to ensure that growth is both sustainable and inclusive.

The situation of the "working poor" must be a matter of particular attention, especially in countries where the formal economy is small, and where many women and men work - often arduously and for long hours - but are simply unable to earn enough to lift themselves and their families out of poverty. When combining paid and unpaid work, women work longer days than men, and this time-poverty impacts on their ability to access decent work ( 8).

During the past fifteen years the ILO, UNDP, the OECD,UN-DESA, the World Bank and others have carried out considerable analytical work on the growth-employment-poverty nexus [see for example: ( 20)]. The World Bank's 2013 World Development Report, entitled "Jobs", highlighted the transformational role of employment in terms of rising living standards, greater social cohesion and improved productivity ( 21). UNDP's 2015 Human Development Report, published under the title "Rethinking Work for Human Development", sought to establish the connection between work (in the broader sense) and human development ( 22). A joint ILO-IMF conference, organized in 2010 in Oslo, examined the relationship between growth, employment and social cohesion. The growth-employment-poverty link was also the central theme of the African Union Extraordinary Summit on Employment and. Poverty Alleviation in Africa held in Ouagadougou in September 2004. The Declaration adopted on that occasion by the African Heads of State places "employment creation as an explicit and central objective of our economic and social policies at national, regional and continental levels, for sustainable poverty alleviation and with a view to improving the living conditions of our people" ( 23).

To achieve the goal of transforming growth into employment the ILO advocates and promotes global policy frameworks and partnerships that aim at generating more quality employment opportunities. At the country level, the objective is to support the ILO constituents to develop, implement and monitor coordinated and context-specific policies and programmes that promote quality job creation through economic diversification and investment strategies, skills development for present and future needs in the labour markets, as well as labour market activation and intermediation that integrate the most vulnerable groups. These include policies and programmes facilitating the transition to formality as well as the creation of employment and income opportunities in the rural economy (see separate section).

DWA-SDG Relationship

The very formulation of SDG 8 "Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all" recognizes that economic growth will be inclusive only if it creates jobs and decent work. Because of the strong link between growth, employment and poverty reduction activities in support of SDG 8 will also support the achievement of SDG 1 (poverty) and 10 (equality). The targets associated with SDG 8 cover a wide range of aspects linked to the Decent Work Agenda, such as productivity (8.2), entrepreneurship (8.3), green jobs (8.4), job creation (8.5), youth employment (8.6), child and forced labour (8.7), OSH (8.8), LED (8.9) and access to finance (8.10). SDG target 8.b calls for the implementation of the ILO Global Jobs Pact (2009) whose fundamental objective is to provide an internationally agreed basis for policy-making designed to reduce the time lag between economic recovery and a recovery with decent work opportunities.

From a Decent Work perspective, the topic of employment-rich economic growth is of course primarily associated with the employment pillar of the DWA; but because of the integrated nature of this agenda the ILO will take the other three pillars into account as well when advocating for greater employment intensity of economic growth.

Cross-cutting policy drivers

Many ILO instruments refer in one way or another to employment issues. Central to the issue of employment-rich economic growth is the Employment Policy Convention, 1964 (No.122) (considered one of ILO's priority instruments and ratified by 111 member states), as well as R.122 (complementing C.122), the Employment Promotion and Protection against Unemployment Convention, 1988 (No.168), R.176 (complementing C.168), and the Employment Policy (Supplementary Provisions) Recommendation, 1984 (No.169). The application of standards is an integral part of ILO's employment promotion programmes.

Employment promotion and the growth-employment nexus is of particular interest to governments and the social partners, and therefore a subject of social dialogue in all nations, especially in situations of economic crisis or downturn.
ILO's employment policy strategy incorporates a gender-responsive approach, including research under ILO's Women at Work Initiative and capacity building on gender equality and non-discrimination.

Climate change and the trend towards a greener economy may present both opportunities and risks for employment creation since it will change the sectoral composition of national economies. For a just and fair transition, these changes must be addressed through pro-employment macroeconomic policies as well as sectoral, industrial, and trade infrastructure investment and also through environmental strategies that generate more and better jobs while promoting structural transformation and enterprise development.

Partnerships

The ILO drives global advocacy for coherence in approaches to employment-rich macroeconomic growth and scales up its support for more and better jobs, including through its leadership of the UN system-wide Global Initiative on Decent Jobs for Youth. Such global advocacy also extends to the Group of 20 (G20) and to the BRICS countries, and fosters South-South cooperation on employment policy. Partnerships and cooperation with the UN system, international financial institutions, regional economic commissions, development banks and sub-regional economic communities will be expanded to deliver on the employment-related goals and targets of the 2030 Sustainable Development Agenda. At the national level, the strategy will require the involvement of ministries of the economy, finance, production and industry, among others, as well as close collaboration with UN country teams.

ILO Capacity

The ILO's work on making economic growth more employment-friendly is driven by the Office's Employment Policy Department, which is responsible for developing integrated employment, development and skills policies that maximize the employment impact of economic growth, investment and development. The Department includes three Branches: Development and Investment (DEVINVEST), Employment and Labour Market Policies (EMPLAB), and Skills and Employability (SKILLS). DEVINVEST coordinates ILO's work on crisis response and in fragile states, which include the ILO flagship programme " Jobs for Peace and Resilience". The ILO's most recent Recommendation, which revises and supersedes, 1944 (R.71) adopted in 2017, bears a similar title: Employment and Decent Work for Peace and Resilience Recommendation, 2017 (R. 205).

Many other ILO Departments and units contribute to employment-rich economic growth: first and foremost the Enterprises Department, but also the units working on rural and informal economies, on migration and on sectoral activities, as well as the Research Department.

Resources

The Employment Policy Department maintains its own documentation centre which can be accessed here. The centre includes several databases on

youth employment

labour-market indicators

labour-based technologies.

Additional resources can be accessed through the ILO library page on employment promotion.
19. ILO. Decent Work Country Diagnostics - Technical Guidelines to draft the Diagnostics Report. Geneva : ILO, 2015.
8. ILO. Women at Work Trends. Geneva : ILO, 2016.

20. Osmani, S.R. Exploring the Employment Nexus: Topics in Employment and Poverty. New York & Geneva : UNDP and ILO, 2002.

21. World Bank. World Development report - Jobs. Washington : World Bank, 2013.

22. UNDP. Human Development Report 2015: Work for Human Development. New York : UNDP, 2015.

23. African Union. Declaration on employment and poverty aleviation in Africa. Addis Ababa : African Union, 2004.

- Brazil, Russian Federation, India, China and South Africa.

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Economic growth alone does not necessarily translate into more and better jobs, especially for the poor, vulnerable and those at risk of being left behind. Economic growth is a prerequisite for increasing productive employment; it is the combined result of increases in employment and increases in labour productivity.

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According to this article, Canada had the second-best performance in employment growth compared with international peers in 2013, behind only Ireland. However, Canada experienced a lag in employment growth after that. In 2016, Canada’s employment growth rate dropped to 0.7%, compared to the 2019-2013 average of 1.4%. However, despite Canada’s fall in international rankings in 2016, this article also shows that British Columbia had the best economic growth rate in 2016: 3.2%. British Columbia scored an A and was tied with Denmark.

I chose this article because it shows Canada performs compared with other countries and how provinces perform compared with one another. Through this article, I learned that an economy whose job prospects are improving can lead discouraged workers to re-enter the labor force.

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Provincial and Territorial Ranking

Key Messages

Seven provinces get either D or D- grades on employment growth, and had overall job losses in 2016.

B.C. is the top-ranked province, scoring an A and tied with Denmark for first overall with employment growth of 3.2 per cent in 2016.

Canada's C grade and 13th-place ranking among the 16 peer countries reflects the fact that the commodity shock has weighed heavily on the economy.

Putting employment growth in context

How Canada Performs examines not only provinces' unemployment rates but also their employment growth rates. Although these two indicators may seem like two sides of the same coin, the employment growth rate measures something somewhat different from the unemployment rate.

The unemployment rate is calculated from two other economic indicators: the total number of people who want to work and are searching for a job but do not have one, divided by the total number of people in the labour force. The unemployment rate is a useful shorthand for overall economic performance, but it obscures some aspects of the employment picture. Crucially, it measures the employment picture only among people who are looking for work. In a place like Japan, where women are less likely to enter the labour force, the result can be an exceptionally low unemployment rate even in the absence of significant job creation.

Individuals' decisions to enter or leave the labour force do tell us something about the economy, as people are less likely to bother looking for work during very bad economic times. But labour participation decisions are also affected by other considerations, like family planning, lifestyle desires, and cultural norms. As a result, economists often like to look at raw employment growth as well, since it is a more direct measure of the economy's performance in creating jobs.

In developed countries, employment growth has been weak since the end of the 2008-09 recession. History reveals that economic recoveries take longer after a financial crisis than after other types of crises (e.g., fiscal crises, oil shocks) for a variety of reasons. In the wake of a financial catastrophe, banks curtail lending growth as they work at getting their balance sheets back in order. At the same time, households hold back on spending in response to weak labour market conditions and in an effort to reduce debt burdens. Governments squeeze spending to lower fiscal deficits that soared as they provided fiscal stimulus to kick-start economic activity during the recession.

These broad trends were present across advanced economies in recent years to varying degrees. The good news is that the legacies of the financial crisis have abated, so employment growth has been picking up across the developed world over the last few years.

How does Canada compare with international peers?

In the last How Canada Performs economy report, which examined 2013 employment growth data, Canada had the second-best performance in the peer country group, behind only Ireland. Since then Canada has slid backwards-the country had employment growth of only 0.7 per cent in 2016. Canada's C grade in this year's report card reflects the fact that it posted the fourth-worst employment growth among its peers in 2016, ahead of only France, Finland, and Norway.

Canada's economic performance was one of the best in the world in the years following the financial crisis: after 2009, Canada experienced four years of solid employment growth averaging 1.4 per cent, while the peer countries averaged 0.4 per cent employment growth. But the commodities price crash that began in 2014 has weighed heavily on the Canadian economy at the same time as peer countries have started to show signs of progress. Since 2014, annual job growth in Canada has averaged just 0.7 per cent, while the peer countries have averaged employment growth of 1.2 per cent.

How do the provinces compare with international peers?

Only three provinces had positive employment growth in 2016: British Columbia-which gets an A for its 3.2 per cent employment growth-and Ontario and Quebec-which get Cs for their 1.1 and 0.9 per cent employment growth, respectively. British Columbia and Denmark (3.2 per cent) are tied for first place overall, ahead of Germany (2.9). Ontario and Quebec's employment growth rates, meanwhile, are comparable to countries like Japan (1.0) and Belgium (0.8).

Employment declined in all four Atlantic provinces and in all three Prairie provinces. New Brunswick scores a D, ranking just ahead of last-place peer country Norway, where employment fell by 0.1 per cent in 2016. The remaining six provinces-Manitoba, Nova Scotia, Saskatchewan, Newfoundland and Labrador, Alberta, and P.E.I.-get D- grades, with the poorest performances among all the jurisdictions.

How do the provinces perform relative to each other?

After many years of leading the country in employment growth, the commodity price crash hit Alberta's and Saskatchewan's economies hard. Both have been in recession, and this has clearly had a knock-on effect on their labour markets. Alberta lost 37,000 jobs in 2016, while Saskatchewan shed 5,000 jobs.

As a share of total employment, though, neither of these provinces had the worst performance in 2016: that dubious honour goes to P.E.I., where employment fell by 2.3 per cent. Atlantic Canada has been suffering badly on the employment front for several years, and 2016 was no different. Since the last How Canada Performs economy report card, which looked at 2013 data, P.E.I.'s employment growth rate has fallen from 1.5 to -2.3 per cent, New Brunswick's has fallen from 0.4 to -0.1 per cent, and Newfoundland and Labrador's has fallen from 0.8 to -1.5 per cent. In the region, only Nova Scotia had stronger employment growth in 2016 than in 2013, although its improvement from -1.1 per cent growth to -0.4 per cent growth simply means it is losing jobs at a slower pace than before.

The size of the Ontario and Quebec economies means that even small employment growth translates into many jobs. Ontario added 76,000 jobs in 2016 (1.1 per cent employment growth), and Quebec added 36,000 (0.9 per cent growth). Just as a commodities price crash hurts resource-based economies in the West and in Newfoundland and Labrador, it benefits the manufacturing and services-based economies of Central Canada, which use commodities as inputs for their goods and services. When global commodity prices are low, we see a shift away from the resource-based economies as the engines of Canada's economic growth.

British Columbia's employment growth for 2016 (3.2 per cent) stands head and shoulders above the rest of the country. Despite having one-third the population of Ontario, British Columbia added about the same number of jobs as the larger province in 2016, with 73,000 new positions created.

Why did B.C. score such a high ranking?

What was behind B.C.'s strong employment growth in 2016 given that it was a dismal year for most of the country, particularly the resource-rich provinces that usually top the rankings? Although British Columbia's economy also relies on resources, its primary resource export is forestry products, which have not suffered the same drop in prices as metals and energy products. And although there is some oil and gas production in B.C., it is a much smaller share of the province's economy than in neighbouring Alberta or Saskatchewan, so the falling price of oil has on balance been a boon for the province rather than a setback.

B.C. did benefit in 2016 from a booming-some would say overheating-housing market that spurred construction. It also benefited from high demand for its forestry products from the United States, which is also experiencing a housing boom. However, in the summer of 2016, the B.C. and Vancouver governments started taking steps to cool the housing sector, introducing taxes on foreign homebuyers and on vacant homes. These policies are already having an effect. A slowing domestic housing market, together with the possibility of protectionist action from the new Trump administration, means British Columbians should not expect to see their province generate quite as much employment growth in 2017.

How closely are job growth and the unemployment rate linked in Canada?

As discussed above, the employment growth rate measures something subtly different from the unemployment rate, which is why economists like to look at both. But how often do the two diverge in practice? Is rising employment not always associated with a decline in the unemployment rate?

For the most part, the two do move together. Of the seven provinces that saw a decline in employment in 2016, five saw an increase in the unemployment rate, and all three of the provinces that saw employment growth also saw a decrease in the unemployment rate.

Nova Scotia and New Brunswick had declines in both employment and their unemployment rates, however. Nova Scotia's employment declined by 0.4 per cent in 2016, but its unemployment rate fell from 8.6 to 8.3 per cent; New Brunswick's employment declined by 0.1 per cent, but its unemployment rate declined from 9.8 per cent to 9.5 per cent. In these cases, the decline in the unemployment rate is related to the aging of the population and the rising number of workers leaving the workforce.

On the other hand, the reverse can also happen. An economy with improving job prospects can lead previously discouraged workers to re-enter the labour force in the hopes of finding a job. An expanding labour force can put upward pressure on the unemployment rate, even if the economy is generating new jobs. This was what happened in B.C. in 2015, when employment grew by 1.2 per cent but the unemployment rate still rose from 6.1 per cent to 6.2 per cent. When the employment and unemployment rates are both rising, it is usually a sign that people are hopeful enough about the direction of the economy that they are entering the labour force in large numbers.

How do the territories rank on employment growth?

The territories all do well on this measure. Nunavut earns an A+, with higher employment growth than the top-ranking peer country, Denmark. Employment growth in Nunavut was a blistering 6.3 per cent in 2016. Both Yukon and the Northwest Territories rebounded from negative employment growth in 2015; Yukon enjoyed growth of 4.1 per cent in 2016, earning an A+, and the Northwest Territories had growth of 2.7 per cent, earning an A.

With economies that rely heavily on resource extraction, the commodity price slump will depress labour markets in the territories over the near term. In Yukon in particular, mine closures will make 2017 a difficult year. Nunavut has a brighter outlook, with several mining projects contributing to employment growth. The Northwest Territories has an outlook in between its two neighbours, with the closure of the Snap Lake diamond mine offsetting rising output at other mines.

The territories are not included in the overall rankings because data are not available for all the indicators in the economy report card. The Conference Board is, however, committed to including the territories in our analysis, and so we provide information on territorial performance when data are available, such as employment growth.

The Conference Board of Canada produces a biannual Territorial Outlook report that examines the economic and fiscal outlook for each of the territories, including output by industry, labour market conditions, and the demographic make-up of each territory. The Territorial Outlook can be accessed online through e-Library and for clients subscribing to e-Data.

Research on issues affecting the territories is also produced by the Centre for the North, a Conference Board initiative that began in 2009.

What could affect future employment growth in Canada?

Major year-to-year variation in an economy's employment fortunes can be due to unpredictable events, like a crash in the global price of commodities, that force employers to hire or lay off significant numbers of people. But most of the jobs in an economy are carried over from year to year, and major trends and projects are often foreseeable years in advance.

The provinces with dismal grades in this report card are likely to see a turnaround. In Alberta and Saskatchewan, the recovery in the price of oil from its recent lows could help spur hiring. The U.S. government recently approved the Keystone XL pipeline, which will help relieve pipeline capacity constraints facing producers in the oil sands. It could also help bring prices for Western Canadian Select, the benchmark price for western Canadian heavy crude oil, closer to prices buyers are willing to pay for other major blends, like West Texas Intermediate. These factors could spur more investment and hiring in the energy industry. Alberta also stands to gain many jobs during the coming years as the reconstruction of Fort McMurray after the 2016 wildfires unfolds.

Likewise, there are upcoming projects that will help boost employment in Atlantic Canada. Nova Scotia stands to benefit from increased employment at shipyards building a new fleet of Arctic patrol ships. New Brunswick stands to benefit from a major hiring spree announced by the Irving Group. P.E.I. should see upticks in manufacturing and tourism.

However, Newfoundland and Labrador has a less positive outlook. That province has suffered a collapse in business investment, which bodes ill for business job creation in the future. It is also undergoing a round of fiscal austerity that will hurt household disposable income and, therefore, the fortunes of retailers of consumer goods. And the construction of the Hebron oil platform, which employed up to 3,000 people in the province in 2016, has now come to an end.

The B.C. housing market showed signs of slowing after the government took decisive action to cool this overheated sector. That will be good for families hoping to afford to live in the province, but it will slow economic growth. Ontario's government has taken similar measures, recently announcing a 15 per cent tax on foreign buyers in the Greater Golden Horseshoe area, which stretches from the Niagara region to Peterborough. This tax will likely have similar effects on Ontario's housing market.

Both Ontario and Quebec do stand to benefit over the coming years, though, from the low Canadian dollar and strong consumer demand in the United States.

Of course, at the time of writing there is still substantial uncertainty about how Canada's trading relationship with the U.S. will be affected by the Trump administration. Any significant new barriers could be bad news for Canadian economies and employment growth.

Over an even longer term, Canadian labour markets will face the challenge of an aging population. As the baby-boom generation retires, employers will have many positions to fill from a shrinking pool of labour at the same time as fertility rates are below replacement levels. The immigration system will have a growing role to play in ensuring that Canadian employers have access to the employees they need.

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Provincial and Territorial Ranking Seven provinces get either D or D- grades on employment growth, and had overall job losses in 2016. B.C. is the top-ranked province, scoring an A and tied with Denmark for first overall with employment growth of 3.2 per cent in 2016.

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