The federal government announced that it received 500,000 applications for employment insurance last week compared to 27,000 for the same week last year.
University of Calgary Prof. Trevor Tombe noted that the 500,000 job losses surpass — in percentage terms — the percent of the monthly job losses in July, 1932, the worst month for employment during the Great Depression. “It seems clear to me that this is the sharpest negative shock we’ve ever seen,” Tombe said. And the number does not include those who have been laid off but were not yet eligible for EI.
Economists are warning these layoffs could just be the beginning. “This is going to be very, very bad,” said Kevin Milligan, economics professor at the University of British Columbia. “My best guess is that we are very likely to do worse in March, 2020, than the worst month in the 1930s.” Prof. Tombe has said Canada’s biggest drop in employment for a single month during the Great Depression was 2.5 per cent.This week’s job loss figure is at 2.6%. Job losses are paralleling market losses as North American stock markets are having their worst month in percentage terms since 1932 as well.
Canadian companies are laying off thousands of employees in what is expected to be the first wave of massive job losses as global demand dries up and businesses shut down because of the policies instituted to fight the coronavirus. The Canadian figure is worrisome as it generally amounts to 10% of the U.S. number. The latter was expected to be 2,250,000 next Thursday, up from 200,000 last month. Our number may presage a higher American number.
Among the major employers announcing cuts were Fiat Chrysler Automobiles laying off 8,900, Cirque du Soleil Entertainment Group laid off 4,679 after stopping all 44 shows in production, Air Canada cut 5,100 flight attendants, Air Transat 1,900, Irving Shipbuilding Inc. suspended operations and cut 1,373 of its 1,800 employees. Susie Grynol, president of the Hotel Association of Canada, said,”The hotel industry has completely crashed over the last 10 days. Those that are still open have skeleton crews and less than 10-per-cent occupancy.” She expects between 200,000 and 250,000 jobs could be lost.
Some companies are still paying staff for scheduled shifts even after closing stores. Indigo Books and Music Inc. is shutting all of its retail locations and will pay employees until March 27, when it plans to reopen. The Bay will pay employees for shifts scheduled for the next two weeks. Gap Inc. is also continuing to pay employees after closing its stores in North America.
Statistics Canada next monthly Labour Force Survey is due April 9 based on data collected from March 15-21.