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COMMENT: The West Kootenay's Incredible Shrinking Labour Force

Over the last couple of weeks I have heard several comments about a “mini boom” that will result from development projects such as the Waneta Dam, the expansion at Firebird Technologies in Trail, the new casino in Castlegar and some recovery in the forestry sector. Based on B.C. Stats data, we may have a long way to go before we get to a “boom.”

In December 2010, the Kootenay Development Region (the three East and West Kootenay Regional Districts) had a 3-month moving average unemployment rate of 8.7 per cent, the highest in B.C. The Thompson Okanagan Development Region was second highest at 7.9 per cent.

These are not seasonally adjusted numbers. If the B.C. average seasonal adjustment is added, our unemployment rate is 9.4 per cent. That’s over 4.5 per cent higher than the unemployment rate in 2007 and early 2008. With the current labour force of 75,700 that means there are over approximately 7,000 unemployed folks in the development region. About 3,000 jobs would have to be created to reduce our unemployment to the 5 per cent range we experienced in 2007 and 2008.

The detailed employment numbers for 2010 haven’t been published yet, but over the 2007 to 2009 period, the major job losses were not in construction (-800). “Stimulus” investment helped that sector stay afloat during the worst of the recession. The big job losses regionally were in manufacturing (-3,800), Educational Services (-1,500) and Information, Culture and Recreation (-1,500). Some of those losses were offset by gains in wholesale and retail trade, and in health and social services.

A major change in our region that isn’t getting attention is that in spite of a reported population growth in the Kootenay Development Region of about 1,800 since 2008, our labour force has declined by 5,700. That’s over a 7 per cent loss. That number is not included in current unemployment rates.

If we want to get back to 2007-08 regional employment levels, we would have to add over 5,000 jobs to replace that reduction in the labour force in addition to the 3,000 we need to reduce unemployment to 5 per cent. The West Kootenay proportion is about half of those two totals, or about 1,500 to reduce unemployment and 2,500 to rebuild the labour force to 2007 levels.

What happened to those 5,700 folks who were in the labour force in 2007 is not clear. Some have retired. The employment reductions in education and in manufacturing, for example, both used “attrition” as one of the options to reduce labour force. Those folks have retirement income, which may partially explain why we haven’t seen a big reduction in wholesale and retail trade.

Others have found work outside of the region. The folks who live here but commute to the oil patch for example don’t get counted in regional employment here; they get counted where they are employed. If good opportunities are available here, some of those folks may decide to shift employment back to the region. There were also many part time jobs that have disappeared since 2007. Some of those employees may have chosen to work because the opportunity was there rather than out of necessity, and they aren’t currently looking for work.

Finally, some folks have just “fallen off the screen”. Employment Insurance social assistance has run out, and they have given up looking for work. How many fit in each of those categories is not clear. The point is that we will have to create a lot more jobs than are being created in the recent construction and manufacturing initiatives before we see any significant job driven “boom” in housing and retail development.

George Penfold is the Regional Innovation Chair at Selkirk College.