The current unemployment rate in Canada is 5.8 percent which is the lowest rate in the last 40 years. During the 1980s the highest unemployment rate in Canada was around 13 percent. Canada maintained an average of 7.8 percent unemployment rate from 1966 to 2017 and then afterwards it is continuously declining on the over-year-over basis and reached to its lowest rate of 5.8 percent in February 2018 (Agritis, 2018).
The reason behind the continuous decreasing level of unemployment rate in Canada itself is rich in the mineral resources and from the past 10 years; the major jobs come up from the sector like mining, constructions and the logistics sector. Last year the Canadian commodity prices performed very well in the international market and this sign shows an increase in the demand for jobs in the mining and agriculture sector because Canada had plenty of mineral reserves.
Source: Trading Economics
Recently, the Bank of Canada is planning to increases its interest rate because of the lowest unemployment rate i.e. 5.8 Percent. If the interest rate will increase, the demand for money in the market will also increase, and thus to control the inflation and supply of the money can be controlled.
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It has increased the wage for permanent employees from 2.7 percent to 2.9 percent. If the minimum wages get increases, it will directly affect the economy of the country because low-level people will also be able to spend more and the flow of money in the market will be high, if the flow of money will increase, it will affect the economy badly as it increases the inflation in the economy also. The increase in wages and decreasing in the unemployment level will lead to increase in the real labour income as shown in below chart. (Benjamin Tal,
The global economy has been recovering from the financial crisis which occurs in 2008, then has a weak growth for most developed countries over 2012 and 2013. But economic activity in Canada has expanded at a faster pace than most other major advanced countries in 2012; however, economic performance in Canada has been unsteady throughout 2013 (The Economic review, 2013). After the last quarter in 2010 GDP growth rate grows rapidly, the GDP grows slowly but steadily in 2012 which remains at around 3 percent. Real GDP growth rate in Canada grows slowly in the first quarter of 2013, but increased by 5 percent in the second quarter ,then remains the same level until the first quarter of 2014 (Statistics Canada, 2014). In 2014, the Canadian government take a series economic action plan as a guide for the economy development such as improving investment conditions, ...
In this section I will be discussing how inflation rates have increased over the past 40 years, and what effect this has had on monetary growth. Inflation rates are defined as the rate of change in price levels in our economy especially Canada. Surveys are conducted quarterly or monthly to determine and generate a Consumer Price Index. The CPI is conducted with a “basket of goods” to determine changes in consumer prices for Canadians. It is important to study and analyze the rate of inflation because it helps the government determine how the dollar value has changed over a period of time. Also to adjust pending contracts and initiate new pensions which have to take into account the effect of inflation. Less well-off people and elderly are more
Over five years after the 2008 economic crisis, the Canadian economy is still in rough waters. Annual Gross Domestic Product (GDP) growth has been lagging below 2% and falling short of economists’ predictions (Hodgson, 2014), with no small part due to the stunted American and European recoveries. Tied into this is the country’s unemployment rate, which has hovered around 7% for over a year, while the rate for those aged 15-24 is nearly double, at 13.6% (Statistics Canada, 2014). Clearly, there is a need for more jobs in the country. At the same time, however, Canadian companies have been bringing in Temporary Foreign Workers (TFW) to fill what they call a “jobs gap”: that there are places in the country where the labour supply is nonexistent, and outside help is needed to fill certain roles. This has set off a firestorm of controversy, both in the commercial and political realms, with accusations of corporate greed and government apathy abounding, as unemployed Canadians are seemingly passed-over for available jobs. This paper will explore how TFWs are filling a necessary role in the economy, and are not “taking jobs” from Canadians, and will then analyze what governments and businesses can do to change the program, how immigration reform can play a role in filling jobs and lowering unemployment, and what risks a focus on a “skills gap” instead of a “jobs gap” can have on the economy.
If this growth rate is too quick, it can lead the economy into a recession. The inflation of prices has doubled since 2015, proving economic expansion. Due to the business cycle, when the economic expansion is finished, recession comes soon after. The job market in Canada has been declining slope, making jobs more scarce to the Canadian workforce.According to Trading Economics, the unemployment rate has grown from 6.6 percent in January 2015 to 7.2 percent in January 2016. In Dinner Party Economic it explains the relationship between inflation and cyclical unemployment and how both topics never occur at the same time, “We don’t see inflation and cyclical unemployment occurring at the same time, which is why economists often talk about the unemployment and inflation as a trade-off”,
One way raising minimum wage will be beneficial is that it could lift many Americans out of poverty. Raising the minimum wage in Illinois, would help the families of more than 1.1 million workers who work to meet their children’s basic needs and “reduce the adverse effects of poverty on a child’s well-being” (Fiscal Policy Center). Studies have shown that raising the minimum wage would help 1 in 5 Illinois families who are in poverty. By raising the minimum wage in Illinois, it would help workers with families spend money on food, housing, gas, and other needs without going into poverty. Along with puling Americans out of poverty, raising the minimum wage could also stimulate economic growth. Raising the minimum wage, is stimulating economic growth by worsening the income inequality and substantially reducing the employee turnover for the business. Increasing a person’s income would raise their yearly earnings by $3,640 and “Improve the economic security and reduce the economies poverty rate” (Fiscal Policy Center). Low-wage workers spend most of what they earn on their basic needs, which is quickly spent and does not leave the worker with much money left to spend on other needs. This boost in the minimum wage will stimulate the economy and help create opportunities for more people, by hiring more workers to keep up with the
“The positive labor market results that policymakers are hoping for” are points such as “Raising minimum wage encourages harder workers” and that an increase will “stimulate the economy by putting more money into the hands of employees for them to be able to spend more” which cannot be done, however, with inflation, because everything continues to get more expensive. Another con to raising minimum wage is that the value of even a minimum wage job increases, which means employers will look for a lot more production out of employees. Right now, the U.S> mandated minimum wage is at $7.25. Even the most unskilled worker can get a job at a McDonalds or Burger King or other restaurants. However, with an increase in minimum wage, as I said earlier about quality over quantity, employers will look for better quality workers and have much higher standards as to who they bring in to the company.
Therefore, raising the minimum wage is beneficial to the economy as it creates jobs and raises the income of millions of people across United States and Canada. The government needs to raise the minimum wage as it raises the income of people, which saves the taxpayers money and allows it to be used on things such as schools and fixing roads. Also, increasing the minimum wage creates wage growth, which helps grow the GDP, as people have more disposable income. Lastly, increasing the minimum wage reduces the wage gap between the CEOs and working class, with the purpose of distributing more of the profits to the working class to help pay for health care and education. In today’s world of capitalism, there should be a cap on how much one can make in a year in order to help the working class, who ultimately help keep the companies in business.
Due to different reasons, many people are unemployed in Canada which is a problem that can lead to many negative consequences. It can influence families, individuals and children. It also may increase the crime rates, divorce rates, and child poverty rates. Children may not be able to finish their education because of their financial situation and their stress which will have a huge impact on themselves and on their future. People may fall into debt problems, many find it difficult to keep up with their mortgage repayments because of long term unemployment. Unemployment rates increased to 7.1% in November 2015 (Statistics Canada, 2015), and nearly 5 million Canadians were considered low income in 2012 (Grant,
“[…] it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, p...
Increasing minimum wage to $10.10 an hour will boost the economy because if people are earning more money, then they will spend more money (Shemkus). In a study done by the Federal Reserve Bank of Chicago, minimum wage workers who received a wage that included an extra dollar per hour created an average of $2,800 in new consumer spending the next year (Berman and Scheller). That is a significant amount of money from such a tiny change, and if enough people were given just a one dollar raise in salary, then that would mean millions of dollars in new consumer spending, so raising salary $2.85 would mean even more money for the economy.
Raising the minimum wage would affect employees. Supporters believe that raising minimum wage will improve people’s lives. We live in a consumer society. People who earn more spend more on products and services. As stated by BuzzFlash Headlines, “Higher Minimum Wage Would Create Over 100,000 New Jobs Nationally” (BuzzFlash Headline). Families would be able to use the money they earn to save for important things such as bills. If they wanted to, they could also buy more groceries or appliances. Non-supporters feel that raising the minimum wage will create many job losses. According to Economic Policy Institute, “Across the phase-in period of the increase, GDP would grow by about $22 billion, resulting in the creation of roughly 85,000 net new jobs over that period.”(David Cooper). If a family owned business has to raise the wage rate they pay, it is possible they will not hire as many people as they usually do. Businesses across the nation would be impacted by raising the minimum wage. According to the CNBC, “The great division among businesses and economists over the impact of raising...
Overall, an increase in the minimum wage could bring many benefits to Americans such as families being able to afford education, healthcare, food, and other necessities without having to choose between resources. The workers incomes are not sufficient to cover a family's needs, so an increase could raise a family's income, create more economic equality, and help consumer spending. The economy could improve if the wages increased because families would not be torn between where their money must be spent. An increase in the minimum wage could create a thriving economy if the wealth was distributed equally to help Americans in need.
By raising minimum wage it puts the worker in a place where if they are able to make more money then they are able to spend more money and that would cause the economy to rise in a very positive way. They would have the chance to now go out and be able to buy some groceries, possibly get some diapers, and even have some left over money to possibly buy a nice shirt to go out over the weekend. Since they are now using their money in different places it helps the economy grow and influx itself into a better place. It can now also help the employer of whichever store they are going to feel a bit more assured with hiring more employees to join him or her workforce and create a bigger and better sales
As Canadian's fertility rate fells, baby boomers retires, immigration and foreign workers becomes very important for the increase of labor demands in the Canadian's job market. The government is planning to reduce the application waiting time and therefore there will be more newcomers coming in the next fewer years. Canadian companies will then have many experienced and foreign trained applicants where they can help Canadian companies to increase their foreign trade and to build a better relationship with the other country. However, new comers have difficulties in finding employment because of their unrecognized foreign qualifications, non Canadian work experienced and the lack of support in the settlement programs where they get help to find employment.
Depending on a person’s perspective, raising the minimum wage could be positive or negative. Minimum wage has the ability to change lives, and change the economy. Small businesses and unemployment, teenage demographics, and the cost of civilian goods would be most affected. The only mystery is whether things would change for the better or for the worse. Many areas could be affected by a change in minimum wage, but potentially the most drastic change would be to unemployment.