Needed: Good jobs

The Globe and Mail reported today that Canada is facing a jobless recovery, as businesses are not expecting to hire in 2010 and public sector positions are being eliminated.

The article quotes Sébastien Lavoie, assistant chief economist at Laurentian Bank Securities, who predicts that we will see employment restored to its pre-recession level in 2011.

In fact, Lavoie might be overly optimistic in his prediction. Experience from Canada’s past recessions suggests that employment recovery is neither quick nor smooth following a recession. In the last recession, employment improved after the first 11 months. But then, after a mere 6 months of modest growth, it declined again for another 7 months.

Once the recession was officially over, in 1993, it took another 8 years for unemployment to decline to its pre-recession level.

This is why the continued stimulus announced in last week’s budget is so important, and may not actually be enough. More than 1.5 million Canadians are unemployed, and the private sector is not creating enough new jobs. Hundreds of thousands of Canadians are running out of their Employment Insurance benefits, and are still not able to find new work. This is hundreds of thousands of our fellow Canadians vulnerable to economic insecurity and poverty.

There’s also another employment challenge that requires urgent attention: the growing proportion of precarious work. Prior to the recession, 1 in 3 jobs was precarious or non-standard: part-time, temporary, contract or self-employed, with low wages, few or no benefits, and little stability. The recession has increased the proportion of precarious work as full-time jobs have been replaced with part-time jobs and permanent positions with temporary work.

A TD Economics Report yesterday included this change in its list of labour force macro trends. While the report generally does a good job of describing these macro trends and their implications, I think they drop the ball on the growth in temporary and part-time work.

The report asks the question of “whether or not it is prudent for the government to step in and provide better income security and non-wage benefits in the private sector’s absence.” The conclusion? This question is too difficult to answer because we don’t know whether the move to precarious work is the result of employers’ choice or employee choice.

But does it matter? We know that people in precarious work are more likely to be living in poverty. We know that people in a precarious financial situation are more likely to suffer from health problems and to experience social exclusion. We know that non-standard work contributes to the growing income gap (highlighted elsewhere in the report as a problem calling for public policy attention), and that a large income gap contributes to decreased well-being for both sides of the gap. Isn’t this reason enough to respond to the growth in precarious work, whether it’s the result of employee choice or not?

I’m also not sure to what extent their data supports the conclusion that part-time and temporary work may be employee choice. By their own count, 1 in 4 workers is working part-time involuntarily. That’s a pretty high proportion.

But how many parents (and mothers in particular) make a “voluntary” choice to work part-time because the lack of childcare leaves them with no other option? How many others “voluntarily” work part-time because their workplace does not provide enough flexibility for them to meet caring obligations or engage in continuous learning? And why do we always assume that it’s okay for young people to have part-time or temporary work, as if you have no need of a decent income or financial stability until you hit age 30?

While the government should engage the issue of pensions and retirements savings, which the TD report suggests is the appropriate response, I think a much broader public policy response is called for. Governments at all levels should mandate living wages, so that no job is allowed to exploit someone for less money than they can survive and thrive on. A government-led job creation program is required to ensure that good jobs are created in the recession’s wake. The EI program needs to be reshaped so that more of the unemployed qualify, and recipients receive a decent benefit level. And it’s time to consider a Guaranteed Livable Income for all Canadians, so that everyone is assured of income that provides a basic but decent standard of living.