VICTORIA: An economic report by the Canadian Federation of Independent Business (CFIB) shows that that, although the national economy lost about 360,000 jobs, the private sector loss was closer to 500,000. Meanwhile, public sector employment increased 3.7 per cent.
Ted Mallett, CFIB’s vice-president and chief economist, said the increase in public sector employment amounts to another form of borrowing from the future, “acting as a brake on future economic expansion.”
The findings are based on data representing recessionary shifts of employment by size of enterprise and industry between the third quarter of 2008 and the fourth quarter of 2009. Mallett said they show that Canada’s economic recovery might have a longer way to go than headline stats might otherwise be suggesting.
“The pain of the recession was partly washed over by public sector employment, the very employment whose sustainability is reliant upon economic performance in the private sector.”
The smallest private sector employers were best at supporting total employment. Payroll employment losses by large firms were 5.6% and 5.9% for medium-sized enterprises. Companies employing fewer than 50 people saw a much more modest decline of 2 per cent.
Manufacturing was the hardest hit, losing almost 219,000 jobs. Most losses (137,800) were sustained among employers of 300 people or more. Employers of under 300 people lost almost 57,000 jobs while those with fewer than 50 employees lost 24,000 jobs.
“As a group, small firms have always outperformed large and mid-sized enterprises during recessions,” said Mallett. “Between the adaptability inherent in their smaller sizes and the heightened value associated with each employee’s role, most small business owners only turn to layoffs as a last resort. They are a stabilizing force in the economy.”
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