Canadian Pizza Magazine

Recession not damaging Canadian job quality: CIBC

By CNW Group   


April 15, 2009, Toronto – While Canadian
jobs are disappearing at a rate not seen since the 1982 recession, the current recession
has not hurt the employment quality of the remaining Canadian jobs, finds a new
report from CIBC World Markets Inc.

Since October 2008, the Canadian economy
has lost 356,000 jobs or 2.1 per cent of the national workforce. However, over
the same period Canadian job quality has basically held steady, declining a
trivial 0.2 per cent according to CIBC's Employment Quality Index (EQI). The
bank's EQI ranks job quality by assessing a number of factors including the
distribution of part-time vs. full-time jobs; self employment vs. paid
employment; and the compensation ranking of full-time paid employment in more
than 100 industry groups.

"The relative stability of employment
quality during the current recession is at odds with not only the pace of job
losses in the economy, but also the trajectory seen during previous
recessions," says Benjamin Tal, senior economist and author of the report.


"During the 1991 recession, the three
per cent drop in overall employment coincided with a 7.7 per cent drop in the
quality of employment. The Canadian experience this time around is also very
different than the situation in the U.S. where the quality of employment has
fallen by 6.4 per cent over the past year and by 4.2 per cent in just half a

Mr. Tal attributes the surprising strength
in Canadian employment quality to the fact that the bulk of job losses to date
have been in low-paying positions. "To be sure, the number of high and
low-paying jobs fell dramatically over the past six months, but the damage was
more pronounced among low-paying jobs.

"One reason behind the fact that
employment in low-paying sectors is falling faster than in high-paying ones is
the significant decline in employment among young Canadians. Total employment
among workers age 20-24 fell by no less than 4.2 per cent over the past year
and by 2.9 per cent over the past six months alone. And since many of these
young workers are in sectors or occupations that earn less than the average
wage, this trend worked as a positive for the quality measure."

But the key factor in the relative
stability of the EQI during one of the most difficult recessions in the
post-war era is the role of women in the labour force. Not only has the
employment rate among women risen dramatically over the past decade, so has the
quality of the jobs they hold. The number of women in professional occupations
in business and finance has risen by no less than 50 per cent over the past
decade — more than double the rate seen among men. The same can be found in
many other sectors such as public service and the social sciences.

"And so far, women are faring much
better than men during this recession, with total employment among women hardly
changed over the past year vs. a 3.3 per cent drop among men," adds Mr.
Tal. "And the fact that many of these women hold relative high quality
jobs was an important factor behind the resiliency of our quality index.

The report also identified a number of key
trends affecting job quality in the country.

-Full-time employment fell dramatically
over the past year, while part-time employment rose 3.5 per cent — with most
of the gains coming during the past six months. This had a negative effect on the

-Over the past year paid-employment fell
2.1 per cent while self-employment rose 1.5 per cent. Since October 2008,
self-employment has remained constant while paid employment has fallen by 2.4
per cent. Given that on average, the self-employed earn less than 80 per cent
the income of paid employees, this trend worked as an additional negative pull
on the index.

-Western Canada is clearly showing the
fastest rate of deterioration in the quality of employment, reflecting
economies that are rapidly losing momentum.

-In Ontario, growth in the quality of
employment is now in negative territory, but only to a limited degree —
despite the massive job loss in the manufacturing sector.

-The quality of employment in Quebec and
Atlantic Canada continues to rise.

Mr. Tal notes that while the Canadian
economy, including the Canadian labour market, will continue to deteriorate in
the coming months, the strength of job quality bodes well for the future.
"The relative stability of our employment quality index suggests that when
the labour market turns a corner, job gains will translate into income gains
much more quickly than they have in the past, as the base of the existing
labour pool is of a higher quality when compared to previous recessions."

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