Part-time nation: How job ‘quality’ in Canada is eroding

TheGlobeandMail.com – ROB/Business Briefing
Nov. 29, 2016.   MICHAEL BABAD

Job ‘quality’ deteriorating

Canada isn’t quite a nation of burger-flippers, Canadian Imperial Bank of Commerce says. But there has been a”slow but steady deterioration” in the quality of jobs, its deputy chief economist warns.

Much of this has to do with the rise of part-time work, which has accounted for 90 per cent of job-creation in Canada in the past year, according to a new report by Benjamin Tal.

There’s more, of course, such as simple demographics, but the bottom line is that employment conditions aren’t as strong as they used to be when you look at it from a pay perspective.

“Is the quality of employment in Canada in decline?” Mr. Tal said in the report.

“We think so. By looking at the distribution of part-time vs. full-time jobs; self-employment vs. paid-employment; and the compensation of full-time paid- employment jobs in more than 100 industry groups, we observe a slow but steady deterioration.”

His findings don’t only have ramifications for incomes, and thus spending. They also come at a time when unemployment has been hovering around the troubling 7-per-cent mark, and is forecast to remain elevated.

Mr. Tal looked at pay, which he admitted makes for a”very narrow definition of quality” because it doesn’t take into account certain other factors, such as job satisfaction.

But it’s a fairly strong measure, one that uses special Statistics Canada data and, more importantly, shows that”the share of low-paying jobs in Canada has been on the rise in the past two decades.”

Indeed, he looked at it from every which way.

Mr. Tal found that the share of lower-paid work in the economy has been climbing, as this chart shows.

See Chart: ‘Share of below average wage jobs’ – http://www.theglobeandmail.com/incoming/article33085783.ece/binary/wages.jpg

This second chart breaks down full- and part-time work by income levels, showing the range by percentile.

See Chart: ‘Average hourly earnings by percentile’ – http://www.theglobeandmail.com/incoming/article33085782.ece/binary/percentiles.jpg

As Mr. Tal documented, part-time work spiked during the last recession, climbing to a 20-per-cent share of the Canadian jobs market from 18 per cent.

Now, so many years later, that share still stands at 19.5 per cent.

Worrisome, too, is that while certain pay trends haven’t changed all that much in full-time work, the distribution of that work certainly has.

There are traditionally higher-paying sectors, such as mining, and lower-paying ones like retailing.

What Mr. Tal found is that”the compensation distribution of full-time paid-employment has worsened over the past decade with the number of jobs in lower-paying industries rising faster,” though that has changed somewhat of late.

There is also some”good news” in that low wage-earners are seeing a boost, though that’s largely because minimum wage rates have been climbing.

And having said that, wage-earners in the middle of the pact have seen only “sub-par growth” in their pay.

“Different measures of quality such as job satisfaction or work environment might lead to different conclusions,” Mr. Tal said.

“Neither does the decline in employment quality over the past two decades mean that we have turned into a nation of ‘hamburger-flippers,'” he added.

“Rather, it suggests that the distribution of employment in Canada is not as favourable as it used to be, looking strictly at compensation. Lower quality employment might help to explain the sluggish growth in personal income in the past two decades and might provide some insights on the ability of workers, in aggregate, to absorb future economic shocks.”

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