Labour markets Atlantic provinces have highest unemployment rates in North America

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Matt McCann
TELEGRAPH-JOURNAL

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New Brunswick's labour market is not doing well, according to the Fraser Institute's annual comparison of labour markets.

Overall, the province ranked 43rd out of 50 states and 10 provinces measured by the right-wing think tank. Results were calculated using five indicators: average total employment growth, average private sector employment growth, average unemployment rates, average duration of unemployment and average labour productivity.

Neil Veldhuis, director of fiscal studies at the Institute, said the province's performance, outlined in the report, is "concerning across the board." The study, entitled Measuring Labour Markets in Canada and the United States: 2008 Report, was released Thursday.

The biggest blow to the province was its low ranking for worker productivity - second last at 59th, followed only by Prince Edward Island.

Also dragging New Brunswick down is its high average unemployment rate of 9.2 per cent. Only Newfoundland and Labrador, and Prince Edward Island did worse.

The province did do well, however, coming seventh with its average duration of unemployment, but low scores in average total and private employment growth offset any gains it might have seen.

A 1.1 per cent rate of total and private employment growth put New Brunswick 33rd and 31st respectively.

In fact, the Atlantic Provinces were all in the bottom half of the North American rankings, knocked down by having the highest unemployment rates in North America combined with low levels of productivity.

Newfoundland and Labrador - 51st overall - has the worst performing labour market among the provinces, while Alberta, the only province in the top ten, has the best-performing labour market in North America, a reflection of strong job growth, high productivity and low duration of unemployment.

Also affecting the rankings are unionization, minimum wage, public-sector employment and labour relations laws, factors that the Institute says have a negative impact on labour markets.

New Brunswick's public service makes up about 22 per cent of its total labour force, with 28.2 per cent of employees being unionized. According to the report, Canadian provinces maintain a higher level of public-sector employment than U.S. states, and the Institute said lower labour productivity in the public sector is problematic given that workers in there tend to receive a wage premium compared to their private-sector counterparts.

"Productivity in the public sector is much lower than productivity in the private sector," Veldhuis said.

In Canada, the level of worker unionization - 31.8 per cent - is higher than the U.S., which has just 13.5 per cent of its workforce unionized. With the exception of Alberta, all provinces hold relatively high minimum wages.

The report said higher minimum wages have been proven to reduce employment and on-the-job training.

- with files from Canadaeast News Service and CanWest News Service