Why the Bank of Canada wants unemployment to rise

In today’s Big Story podcast, the government body overseeing the economy has been hoping for a while now that some of the low unemployment rates that have been driving up salaries and opportunities for workers will vanish. It’s a key pillar of their plan to steer the country away from a recession. That, and higher interest rates.

A surprising amount of our economic future is being determined because, according to contemporary economic thought, things were going too well. So now we’re paying for it, and hoping we don’t end up paying even more.

Jim Stanford is an economist and director of the Centre for Future Work. “It seems kind of perverse to think of a powerful government agency trying to get unemployment up, but that’s exactly what they’re trying to do, and it’s working,” said Stanford.

Here’s how we got here, what the Bank of Canada hopes will happen, and what we can expect those forces to do to, you know, us.

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