This post was written by Mike Veall of the Department of Economics at McMaster University.
I have been asked by a few people about my statement here that “I would hope that whoever is in charge, whoever wins the election, that eight years from now we would have a million more jobs …I would expect the employment rate to continue to bounce back from the recession. That alone, probably, would get us to a million.”
I should have said “close to a million” but here’s my calculation:
From CANSIM, Table 282-0087, in April 2012, the number of employed in Ontario (seasonally adjusted) was 6,919,900 and the population age 15+ was 11,313,900. The employment rate of Ontario was therefore 6,919,000/11,313,000 = 0.612 or 61.2%.
From http://www.fin.gov.on.ca/en/economy/demographics/projections/table10.html, the reference scenario projection of the 15+ population of Ontario in 2022 is 12,608,550 (total population of 14,985,150 less the 0-4 population of 800,710 less the 5-9 population of 787,470 less the 10-14 population of 788,420). If the employment rate stays constant at 61.2%, under this population scenario employment will be 0.612 × 12,608,220 = 7,716,433 in 2022, which is almost 800 thousand greater than April, 2014 employment. The Labour Force Survey suggests that the Ontario population forecast (which appears to have been made in 2013) is a little high: my adjustment for that reduced the gain to about 700 thousand.
From CANSIM, Table 282-0027, the Ontario employment rate was very close to 63.5% throughout 2007 and for 2008 before November. If Ontario returns to that employment rate by 2022 and the reference scenario population projection holds, employment will be 0.635 × 12,608,220 = 8,006,429 which is well over a million greater than April, 2014 employment. Again, however I note that the reference scenario population may be tracking high: when I adjust for this I get a gain of a little less than a million.
I am open to criticism for suggesting the employment rate will bounce back from the recession without reference to policy (where there are big differences in views as to what the right policy is). Regardless, my view is that job quantity should never be the only focus. Job quality and GDP growth are more closely linked to prosperity.
Note: This is a follow-up to Mike's earlier post.
Worthwhile Canadian Initiative 
I think that’s the better criticism of Hudak’s platform, namely that it’s not terribly ambitious Mind you, if his opponents think it unreasonable, that doesn’t bode well for their expectations of the future of the Ontario economy.
Nothing, however, makes up for the Tory’s inability to do math. (Also looks bad on us economists, Hudak has an MA in economics).
Mike: my guess would be that with the baby boomers retiring, the 15+ labour force participation rate would tend to decline, simply from composition effects. A bigger percentage of 65+ people and a smaller percentage of 15-65 people, within that 15+ group.
Nick: Good point. I also did it excluding the 65+ group (who conceivably may be working more then). It makes a difference, but still well over 900,000 jobs, if we get to pre-recession employment rates for the 15-64 group. The adjustment for the difference in the reference group forecast and the Labour Force Survey makes much more difference, but I don’t understand why that appears to be necessary.
That does put the statement into perspective – so his platform is actually saying “no tangible net improvements” when he says “a million jobs”.
When Livio posted his musings that a Million Jobs was possible back in January I had to point out that the plan seemed implausible even with the few details that were provided:
“As a professional economist, if someone came up to me and presented that plan as their baseline for the next 8 years they would have significant difficulty defending it.
But this policy isn’t for professional economists.”
As the defense now seems to be ‘???, underpants, MaRS’ seems I was right.
http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/01/one-million-jobs.html
Gratuz:”so his platform is actually saying “no tangible net improvements” when he says “a million jobs”.” Exactly the Liberal platform in QUÉbec last election. And they were duly elected.
“so his platform is actually saying “no tangible net improvements” when he says “a million jobs”
Actually, I think the platform is “you could do worse!”. As an aside, if Hudak loses,I’m going to run to replace him on the slogan “Bob Smith: You’ve done worse”