COMPARATIVE LABOR MARKET TRENDS ANALYSIS
ANALYSIS 4 2. Provincial Trend Analysis 4 2. Provincial Economic Analysis 9 2. Canadian Labor Market Comparison 16 3. CONCLUSION 19 4. The study was divided into three main sections that included the introduction section, analysis section, and the conclusion. The first section is the introduction where the focus is the analysis of the background in relation to labor markets. This first section introduces the various aspects within the labor market and defines the scope of the study. The study was carried out by analyzing the labor market trends within Saskatchewan province within Canada. The study had a specific period for the analysis, which was between 2001 and 2016. The study ascertained the presence of a positive relationship between the number of employees and the average weekly earnings. The annual percentage growth in the employment is closely tracked by the growth in the Labor participation rate for Saskatchewan province between 2001 and 2016.
For the period of analysis between 2001 and 2002 in Saskatchewan province, the annual percentage growth in the GDP rose gradually and this was accompanied by an increase in the employment rate within this period. From the study the Labor participation rate annual growth the Saskatchewan province has outperformed Canada as a whole within the period of analysis between 2001 and 2016. The unemployment between Saskatchewan province and Canada as a whole has been mixed with Canada outperforming the Saskatchewan province in some years and the reverse happening in other years. Each of the three stakeholders has to make various decisions within the labor market and it is the nature of these decisions that define the dynamics within the labor market. Within the labor market, individuals have to make various decisions that include; when to enter the labor force and the type of job search to carry out.
The individuals also have to make the decision regarding the type of industry that they desire to work in and the wage rate that is acceptable to them. The individuals within the labor market also have to make decisions that relate to the relocation if that is required of them from the employment. The firms on the other side also make various decisions that influence the dynamics of the labor market. The equilibrium within the labor market is determined by the interaction of the forces of demand and supply within the labor market. The equilibrium in a simple labor market is determined graphically as indicated in figure 1 below. From figure 1 below the interaction of the demand and supply results in the determination of the market prices.
After the interaction between the demand and the labor in the labor market, the market wages are determined. If we have an excess supply of labor in the labor market, a reduction in the labor market wages will follow. The scope of study. This study focusing on the analysis of the labor market trends in Saskatchewan from 2001 to 2016. The study also carries out a comparative analysis of the labor market trends in Saskatchewan and Canada as a whole during that same period. The analysis will focus mostly on the trends in the labor participation rates, employment rates, unemployment rates and the average weekly wages. Organization of the study. • Unemployed: This includes all the individuals that are able and available to work but were not able to get any employment over the previous four weeks.
• Labor Force: The labor force is computed by summing up the number that is unemployed within the economy plus the total number of the employed. Labor Force = Number of employed + Number of unemployed • Unemployment Rate = • Employment Rate = • Labor Force Participation Rate = 2. ANALYSIS 2. Provincial Trend Analysis This is the first part of the labor market analysis. The employed refers to the total number of people who are employed both on the permanent and short-term basis. The employed also include people who have some employment but are on a short break from employment. From figure 2 above, there exists a close link and relationship between the labor force on one side and the employment on the other side. From figure 2 above the employment closely tracks the labor force movements.
From above the relationship between the labor force and the employment is positive and whenever we have increases in the labor force such changes are accompanied by an increase in the employed within Saskatchewan province. The onset of the Global Financial Crisis in the year 2007 had the impact of resulting in an economic slowdown. The economic slowdown, in turn, meant that companies had to reduce their production levels and hence fewer people were employed. The increase in the labor force represents the increase in the unemployment during this period. The employment stabilized from the year 2010 as the government economic recovery measures began to have the desired positive impact. The increase in the employment and the labor force from 2010 to 2012/2012 was as a result of increased economic recovery measures being adopted to quell the negative impacts of the Global Financial Crisis.
This means that between 2000 and 2001 more people were employed in comparison with the previous year. From the years between 2002 and 2005, there was a decline in the employment rate, which was accompanied by a decrease in the unemployment rate within Saskatchewan province. Here the explanation for this trend would be provided from the out of work labor, which is not included in the computation of the unemployed within the economy. Some individuals may have given up looking for jobs altogether and these workers are classified as being out of work. In most cases, this number of people that have given up looking for jobs are not included in the calculation of the unemployment rate in the economy. The average weekly earnings are specified based on the size of the various organizations.
Figure 4 above represents the information relating to the Average Weekly Earnings for Saskatchewan province between the years of 2001 and 2016. From figure 4 above we can note that for all the firm sizes the average weekly earnings has been gradually increasing from the year 2001 towards 2016. The size of the organizations representing the average weekly earnings is specified at various classes. For all the organizations on average, there has been an upward trend in the movement of the average weekly earnings from the year 2001 to 2016. As illustrated by figures 4 and 5 above the average weekly earnings has a gradual upward trend when the data for all the firms are evaluated for Saskatchewan province between 2001 and 2016. The trend for the labor participation rate on the other hand seems to be stable between the years of analysis 2001 and 2016.
The annual percentage growth in the unemployment rate does not seem to have any close link to either the average weekly earnings and the labor participation rates within Saskatchewan province. Figure 6: Employment, Average Weekly Earnings & Labor participation Saskatchewan province. Note: The above graph illustrates the employment rate annual percentage growth, Average Weekly Earnings for all sized firms & Labor participation rate annual growth for Saskatchewan province. This section analyzes the various economic variables and their impacts on the trends within the labor market. The economic variables that are analyzed here include the Real GDP both at the province level and at the industrial level. The other economic variable that was evaluated was the Consumer Price Index (CPI) where the focus was to evaluate how changes in the CPI influence the labor market trends within Saskatchewan province.
The last economic variable that was evaluated was the population and its impact on the trends within the labor market in Saskatchewan province. Figure 7: Employment, Unemployment & GDP. For the period of analysis between 2001 and 2002 in Saskatchewan province, the annual percentage growth in the GDP rose gradually and this was accompanied by an increase in the employment rate within this period. On the other hand, the other hand as the economy expanded more output was produced and as more people were employed the unemployment within Saskatchewan province declined. From figure 7 above between 2002 and 2006, there was a gradual increase and decline in the annual GDP growth rate. This gradual increase than declines in the GDP growth rate was accompanied by a gradual increase and decline of the unemployment rate.
The employment annual percentage growth between 2002 and 2006 had a gradual decline. Between 2010 and 2013 unemployment gradually declined as the as the economy recovered slowly. With the increased GDP growth between 2010 and 2013, the employment growth also improved while the unemployment declined within Saskatchewan province. From the year, 2013 there was a slowdown in the economy and this can be explained as the economy undergoing correction after the rapid and broad expansionary monetary and fiscal policy. From 2013, the GDP annual growth and employ employment have been declining with the unemployment increasing. From figure 8 below, we have another variant of the trends relating to the Employment, Unemployment & GDP. From figure 9 above further trend, the analysis is carried out for the unemployment and the GDP annual growth rates within Saskatchewan province.
From economic theory as stated earlier an increase in the annual GDP growth should result in a reduction in the unemployment within the economy. Looking at figure 9 above, we note the high rate of unemployment when the economy in Canada was faced with the recession because of the negative shocks from the Global Financial Crisis. The figure 9 above goes to further support the findings illustrated by figures 7 and 8 above. The deviation of the negative relationship between the GDP growth and the unemployment can be explained by the lack of consideration of the portion of the labor force that has given up looking for jobs as explained by figure 7 and 8 above. Figure 11: Goods-producing Industries vs. Service Producing Industries (Canada). Note: The above chart represents the portion of the GDP that comes from the Goods-producing Industries and the Service-Producing Industries Canada.
From figure 11 above, we have the representation of the portion of the GDP that comes from the Goods-producing Industries and the Service Producing industries in Canada. From the above figure, the contribution from the services industries has been rising gradually from the year 2001 up to the year 2016. All the trends are specified at the annual percentage growth. Figure 13 above presents the information relating to the Population, CPI & Unemployment Rate trends within Saskatchewan province. All the trends are specified at the annual percentage growth. The aim of the above graph compares the trend in the population growth with the unemployment and Consumer price index. The consumer price index is a proxy variable that represents the level of inflation within the economy. Under this section, four labor market determinants are considered and these include the Labor Force Participation Rate; Employment Rate; Unemployment Rate and the Average Weekly Earnings.
The section will evaluate the performance of the labor market in Saskatchewan province and Canada as a whole. Figure 14: Labor Force Participation Rate. Note: This graph presents the labor market participation rates annual percentage growth for Saskatchewan and Canada as a whole. From above figure 14, we note that the labor participation annual percentage growth rates trends for Saskatchewan province and Canada have a close relationship. From the above graph, we can note that on average for the entire period of the labor market analysis between 2001 and 2016 the percentage growth rate for employment growth rate for Canada has outperformed that from the Saskatchewan province. Between 2001 and 2005 the employment growth rate in Saskatchewan province is higher than for Canada as a whole. Between 2006 and 2007, the percentage growth of the employment in Canada outperformed that from the Saskatchewan province.
For the period between 2007 and 2008, the employment growth rate in Saskatchewan province outperformed that from Canada as a whole. During the period when the economy was hit by the Global Financial Crisis between 2008, and 2010 the employment growth for Canada as a whole underperformed that from the Saskatchewan province. Figure 16: Unemployment Rate. Note: The above graph illustrates the employment annual percentage growth rate for both the Saskatchewan province and Canada. Figure 17: Average Weekly Earnings. Note: The above graph illustrates the average weekly earnings rate for both the Saskatchewan province and Canada. The last comparison as presented in figure 17 above relates to the average weekly earnings for all the firms. From the study, there exists a strong and positive of a relationship between the labor force and the employment in Saskatchewan province.
The labor force and the employment in Saskatchewan province track each other very closely whereby an increase in one is followed by an increase in the other. The study also ascertained the presence of an inverse relationship between the unemployment and the employment for the most part of the data for Saskatchewan province between 2001 and 2016. The study ascertained the presence of a positive relationship between the number of employees and the average weekly earnings. From the figure, it can be noted that the organizations with 0 to 49 employees have the lowest average weekly earnings throughout followed by the organizations with 50 to 299 employees and finally those with more than 300 employees have the highest. d. McGraw-Hill Ryerson Limited. Borjas, G. Labor economics (3rd e.
d. New York: South Western Cengage Learning. Sapsford, D. Tzannatos, Z. The economics of the Labor market. Basingstoke [u.
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