The Illusion of Alberta’s Jobs Recovery: Government vs. Private Sector Employment

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The Illusion of Alberta’s Jobs Recovery: Government vs. Private Sector Employment

Summary

  • With a drop in commodity prices in 2014 and the ensuing economic downturn, Alberta’s weakened labour market has attracted considerable attention. Nonetheless, Premier Rachel Notley’s government has touted recent employment figures as a sign that the situation is improving, arguing that total employment has recovered to its pre-recession peak.
  • However, focusing on total employment misses an important recent trend in Alberta’s labour market: the primary driver of total employment growth is an increase in government sector employment.
  • The recent growth in government sector employment began in July 2014 and has continued through the latest month of available data at the time of writing (May 2018). Over the period, government employment increased by 78,733 (21.5 percent) while private sector employment (excluding self-employed) fell by 46,267 (3.0 percent). As a result, the government sector’s share of total employment (excluding self-employed) increased from 19.5 percent to 23.2 percent—a level not observed in Alberta since 1994.
  • In contrast, Saskatchewan—another energy-dependent province affected by the drop in commodity prices—increased its government sector employment by just 2.1 percent from July 2014 to May 2018. That is a tenth of Alberta’s government sector employment growth rate (21.5 percent) over the same period.
  • Research suggests that the increase in government sector employment, and the decline in private sector employment, will translate into less overall prosperity for Albertans.

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