While the three economies for which EMSI currently provides data are similar in many respects, Canada, the UK, and the US also have some significant differences. After all, in Canada an unemployment report that claims a monthly job loss of 50,000 jobs is viewed as catastrophic, while in the US that same change from one month to another would be so small as to be unnoticeable. Everyone knows that the US has a larger economy than the UK or Canada – but it’s hard to get a sense of just how different they are. To get a better sense of the relationship between the three, we’ve stacked up some data comparisons between the three nations, along with a number of visualizations. See the complete infographic here.
The first and most obvious point of comparison between any three countries has to be population, and right from the beginning it’s clear that the US economy is operating at an entirely different scale from Canada and the UK. As of 2012, Canada had a population of 33 million, while the UK had, surprisingly, almost twice as many people – approximately 61 million. The US, however, had over 315 million citizens in 2012. That’s three and a half times the population of the UK and Canada combined!
Labor market data is less concerned with the entire population of the country than it is with the national workforce. Here, too, the US is an order of magnitude larger than Canada or the UK. The 2012 US workforce was comprised of 138 million jobs. Canada, on the other hand, had 15.6 million jobs, while the UK boasted a slightly larger 27 million. These totals are for wage-and-salary workers only and don’t include self-employed workers.
The best way to cut through the huge size differences between the three economies is to look at percentages and rates of change, such as comparing the size of each economy’s workforce with the actual population of the country. In Canada, for example, there were 15.6 million jobs for 33 million people, which translates to an active workforce of 47.3%. The UK had a somewhat lower employment rate; 27 million jobs for a population of 61 million, which works out to 44.3%. The US, surprisingly, came in last. Its 138 million jobs were just 43.8% of the total population.*
Another useful statistic, in relation to this, is each country’s unemployment rate. After wildly fluctuating during the highs and lows of the last decade, all three economies have settled into a surprisingly similar unemployment rate. As of the first quarter of 2013, the US was at 7.6%, while the UK was lagging a little behind at 7.7%. Canada, which weathered the 2008-2009 recession better than either the US or UK, is ahead by a nose with a slightly lower unemployment of 7.2%.
Of course, the essence of an economy comes from the money changing hands, and especially the wages being paid to workers. In this area, Canada has distinct advantage. When converted into US dollars, Canada’s median hourly wage is an impressive $22.38. The UK trails behind it at $20.50, while the US pays only $19.79.
It’s also interesting to consider just how remarkable the UK economy is in terms of its density. While Canada’s small population is distributed across a vast geographical area (roughly 9 people per square mile), and the US is significantly denser at 83.8 people per square mile, the UK’s 61 million people are crowded into their very small island at an enormous 671 people per square mile. For context, if the US were populated at that density, it would have a population of 2.5 billion people – almost twice as many as China.
Curiously enough, all three countries are built on a similar profile of high-employment industries. While the precise definitions of the different industries vary from nation to nation, there are definite similarities when we look at the largest industries in each. Hospitals, for example, were a top three employer in each country; they even took two spots in the US top five, thanks to the presence of both private and public hospitals in the US economy. Large-scale public sector employment is the most important single industry sector in each country, actually; different levels of government, education, and healthcare took up the majority of spots in our rankings.
What has mattered the most over the last decade, for all three economies, has been the rate of job creation, or of change in the number of jobs available. We tracked this rate out, taking the number of jobs in 2003 as a starting point and comparing the three countries against each other.
Over the last 10 years, the UK has had the most volatile economy; not only did it see the most remarkable spike in job growth before the recession (from -1% to almost 4% in 2008), it also saw the sharpest decline during the recession (down from 4% to almost -4% in 2009). The US economy had a more severe low point in ’09, down to a moribund -5%, but other than that major trough the numbers have been fairly consistent. And Canada has done the best, only dipping into negative job change for a single year in 2009, and that only a relatively strong -2%.
Overall, while the US economy has the advantage of vastly superior numbers, Canada and the UK both have distinct advantages. The UK has a compact, efficient workforce, while Canada has enjoyed an unusually consistent economy with higher-than-usual workforce participation and median wages. All three, however, appear to have recovered from the catastrophic recession of 2008-09, and to have reached a point of economic stability.
*Note: these percentages are significantly different from “labor force participation rates,” which are around 63% in the USA. The BLS participation rate is based on a more nuanced formula that takes into account citizens who are eligible to the workforce and are interested in doing so, but are not working, as well as actual employees. For more information about the BLS definition of “labor force,” see this page.
All visualizations in this post came from our larger Data Comparison Infographic. Data for this post came from Analyst, Analyst for Canada, and Analyst UK, EMSI’s flagship labor market data tools. For more information, email Josh Wright. Follow us on Twitter @DesktopEcon.