http://www.cbc.ca/canada/calgary/story/2009/02/06/januaryjobs.html
Summary:
The world economy is still staggering in recession and job losses are continuing to increase in Canada. On Friday, Statistics Canada said that the unemployment rate in January exceeded anything seen during previous economic turn downs in the 1980s and 1990s. In January, the unemployment rate has gone up to 7.2 percent with 129,000 job losses. Most of these jobs were full time positions. Countless economists describes this situation as “horrifying “and “shockingly poor”, since many of them only expected 40,000 job cuts. Many of the job losses were lost in the manufacturing sector. Within this sector, most job cuts were in the motor vehicle manufacturing. The production of furniture; computers and electronic appliances; components; and clothing also decreased in production which led to job losses.
Connection:
The connection between the article and the textbook is demand-deficient unemployment. Usually, when a product is selling well the companies will hire more workers. However, this is not happening right now in Canada. Due to the recession in the world’s economy, demands for numerous of products has declined. People are reluctant to spend their money thus it reduces sales for businesses. Since products aren’t selling well, employers do not need to hire workers. This results in unemployment. Job losses in January were mainly concentrated in the manufacturing sector. People’s demand in cars, clothing, and electronics are declining so companies will not need to produce as many goods. Therefore, employers don’t hire new employees and lay off workers because the consumers demand for their product is low.
Reflection:
The number of job losses in January has shocked many economists. This is caused by the decline in demand of goods by the consumer. Since the world's economy is in recession, everybody is finding ways to save as much money as they can. The article mentioned that the motor vehicle manufacturing sector is suffering significantly. Many employers from this industry are cutting jobs and salaries for people are not buying cars. I wonder how will the government intervene to stop this plunge in unemployment. I also question how long it will take for the world's economy to be out of this recession. Will it be as bad as the 1980s ? There are so many questions but the answers to those are all uncertain.
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2 comments:
I agree this article has also left me speechless as to how the economy especially in Canada is affected by the recession. I was shocked to read that Canada's unemployment rate could go up to 8%, almost a 2% increase within a year. As I continued reading the article, the numbers of people unemployed/laid off were huge compared to the total population of Canada. Many of us Canadians including myself thought that this crisis would not reach to this level, but this article has shown how I was wrong and things are just going to get worse. Even so, there is still hope that this crisis would come to an end hopefully by next year with the help of the 2010 Olympics in Canada.
Kathy Tang
Blk F
I'm pretty surprised that there were 129,000 jobs lost just in one month! I guess even economists couldn't predict that the recession would hit this hard, as they predicted only 40,000 job cuts. I think we're finally seeing the cause and effects of the recession. People are spending less money and buying less goods and services due to the recession because of a decrease in income; therefore they need less people selling products. This type of unemployment is demand deficient unemployment, as mentioned in the text as well as in your blog. This makes me wonder – what’s going to happen to me? When I approach university, I’ll probably get a part time job as well. With the current state of the economy, is that going to be possible? Since they are laying off so many people, I doubt that they were be hiring many newcomers just entering the labour force since we will have less experience compared to some of the others that have recently been unemployed. I hope that Canada manages to get out of the recession by then.
Stephanie P.
Block F
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