economy
THE GREAT SUPPRESSION IN A HISTORICAL CONTEXT The recent rise of BC's unemployment rate has precedents in the magnitude of its increase and its peak, but not in its speed.
A universal feature of economic downturns is an increase in the unemployment rate. Indeed, such increases in the unemployment rate are often used (by non-economists) to define recessionary periods in very practical terms. It is no surprise then that British Columbia’s unemployment rate has increased since the beginning of 2020’s Great Suppression. However, both the speed and the magnitude of the change have been dramatic compared to previous downturns. Since the early-1980s, BC has experienced five distinct periods of rising unemployment. Prior to 2020, the most
recent was the more-than-doubling of the province’s unemployment rate over 31 months during the Great Recession. In comparison, BC’s unemployment rate rose by a factor of 3, to 13.4%, between January and May of this year. While this is not the greatest absolute increase in the unemployment rate, or the highest, that the province has experienced—refer to the 1981-84 downturn for those figures—the current rise occurred over only five months. Though it is an uncomfortable feature of the current downturn, it is somewhat mollified by the subsequent declines in the unemployment rate experienced over the past four months.
A SIGNIFICANT & HISTORICALLY RAPID RISE IN BC’S UNEMPLOYMENT RATE
18%
15.7%
16%
14%
13.4%
12%
10.7%
9.8%
10%
8.7%
8%
7.8%
6%
6.8%
5.5%
4%
4.5%
4.3%
2%
0%
JAN MAY
JAN JUN
MAY DEC
AUG FEB
JAN MAY
MONTHS BETWEEN LOW & HIGH UNEMP. RATE
41
30
8
31
5
PRE DOWNTURN UNEMP. RATE
PEAK UNEMP. RATE DURING DOWNTURN
SOURCE: LABOUR FORCE SURVEY, STATISTICS CANADA DATA: UNEMPLOYMENT RATE, SEASONALLYADJUSTED
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