The Unemployable
You've been applying for months. You're qualified. You're willing. Nobody's hiring. The economy is 'strong.' You start to wonder if something is broken in you. It's not. The system needs you unemployed. You're not a failure. You're a feature.
The System
Every economy textbook teaches NAIRU — the Non-Accelerating Inflation Rate of Unemployment. It's the rate of unemployment central banks consider 'natural.' Below it, they raise interest rates to slow the economy and push people out of work. The Bank of Canada estimates it at 6-7%. That means the system is designed to keep roughly 1.4 million Canadians unemployed at all times. Not because there's no work to do. Because their unemployment keeps your wages down and prices stable. Marx called it the 'reserve army of labour.' Modern economists gave it a nicer name.
NAIRU (designed unemployment)
Unemployed who qualify for EI
Canada labour market spending
The Bank of Canada estimates NAIRU at 6-7%. Below that rate, the Bank raises interest rates to deliberately slow the economy. This is not a conspiracy theory. It's on their website.
Only about 40% of unemployed Canadians qualify for Employment Insurance. The rest get nothing. The system was designed in 1940 and has been cut repeatedly since the 1990s.
Canada spends approximately 0.2% of GDP on active labour market policies — training, placement, retraining. The OECD average is 0.5%. Denmark spends 1.9%. We don't just tolerate unemployment. We underinvest in the alternative.
Let's hear the other side
...and see if it holds water
NAIRU is a contested concept, but interest rate policy does need to balance inflation and employment. Canada's 2021-2023...
The Promise
Full employment used to be the goal. After WWII, unemployment in Canada and the US dropped below 3%. The economy boomed. The middle class was built. Then in 1979, Paul Volcker decided inflation was a bigger threat than unemployment. He raised interest rates to 20%. Millions lost their jobs. It worked — inflation dropped. But the policy goal permanently shifted. Full employment was out. Price stability was in. Your job became expendable by design.
In 1979, Federal Reserve Chair Paul Volcker raised interest rates to 20% to crush inflation. Canadian unemployment hit 12% by 1982. The recession was deliberate. The unemployment was the tool, not the side effect.
During COVID, the Bank of Canada bought over $400 billion in government bonds — creating money to fund CERB, wage subsidies, and business support. The 'we can't afford it' argument collapsed overnight. Canada has monetary sovereignty. We issue our own currency. The constraint is real resources, not money.
The Reality
The headline unemployment rate hides the truth. StatsCan publishes supplementary rates (R4-R8) that include discouraged workers, involuntary part-timers, and people who've given up looking. The real underutilization rate is closer to 10-14%. Youth unemployment (15-24) runs 2-3x the adult rate. Indigenous unemployment is consistently double the national average. The system doesn't just tolerate this. It requires it.
StatsCan's R8 rate (broadest measure of labour underutilization) typically runs 3-5 percentage points above the headline rate. When they say unemployment is 6%, the real underutilization is closer to 10%.
What Works
A Federal Job Guarantee would make the government the employer of last resort. Anyone who wants to work gets a job at a living wage doing community service work — infrastructure, elder care, environmental restoration, childcare. India's MGNREGA guarantees 100 days of work to every rural household. It's the world's largest employment program. Argentina's Jefes de Hogar pulled millions out of crisis unemployment in 2001. Denmark's 'flexicurity' model combines easy hiring/firing with generous unemployment support and active retraining — spending 1.9% of GDP on labour market programs. The alternative to designed unemployment exists. We just choose not to use it.
Active labour market spending (% of GDP)
India's MGNREGA guarantees 100 days of paid work per year to every rural household. It employs over 50 million people annually. It's the world's largest employment program and it cost approximately 1.5% of India's GDP.
Denmark spends 1.9% of GDP on active labour market policies. Canada spends 0.2%. Denmark's unemployment rate is consistently lower, and workers who lose jobs are retrained and redeployed instead of abandoned.
What You Can Do
The question is not whether we can afford full employment. COVID proved we can fund anything when we choose to. The question is who benefits from unemployment and who pays for it.
Read Pavlina Tcherneva's 'The Case for a Job Guarantee' and Stephanie Kelton's 'The Deficit Myth.' Push your MP on EI reform — 40% eligibility is a policy choice, not an inevitability. Ask why Canada spends 10x less than Denmark on helping people find work.