Still Waiting for Recovery: A Look at the Recession's Impact on Employment

We know that the recession significantly increased Canada’s poverty levels. But do Canada’s poor now risk being permanently left behind? In this series of blog posts, we’ll explore the economic indicators, updating the research in CPJ’s 2010 report on the recession, Bearing the Brunt. Check back over the next few weeks for new blog posts on each indicator!

While employment has technically “recovered” from the recession, in that there are now as many jobs as there were before the recession, the new jobs are not the same as the old jobs. In particular, the recession accelerated an ongoing trend in Canada towards precarious employment. Prior to the recession, more than 1 in every 3 jobs was precarious or non-standard: part-time, temporary or contract, with low wages and few or no benefits. During the recession, full-time jobs were lost at a much faster rate than part-time jobs. Since job recovery began, part-time jobs have grown at a much faster rate than full-time jobs. The result has been a shift in the proportion of our economy that is full-time.

In October 2008, 81.4% of jobs were full-time. Between October 2008 and December 2009, 391,000 full-time jobs were lost, while 35,000 part-time jobs were gained. By December 2010, the gap in full-time jobs had narrowed to 176,000 but the number of part-time jobs had increased even more, rising 118,000 above its pre-recession level. As a result, by June 2011, the last month for which data is available, the proportion of full-time jobs had decreased to 80.7%.1 (See Table One for Full-Time and Part-Time Employment Changes.)

The increase in part-time jobs, while consistent across all demographics, has not impacted them all equally. Young people age 15-24 have seen their proportion of part-time work increase from 44.6% in October 2008 46.7% in June 2011. (This data is seasonally adjusted, so the difference is not accounted for by summer vacation.) However, because young people have suffered the heaviest job losses, the actual number of part-time jobs for young people has decreased from 1,163,000 in October 2008 to 1,158,100 in June 2011.

Women have seen the largest increase in part-time work, with the number of jobs rising 91,900 between October 2008 and June 2011, an increase of 6.3%. However, because men’s involvement in part-time work was smaller to begin with, they have seen a greater increase in the proportion of part-time work, a jump of 11.97% or 68,100 jobs. 2 (See Table Two for Changes in Part-Time Employment by Demographic.)

Because the job recovery has been driven by part-time work, a larger number of Canadians are now working part-time involuntarily. Between October 2008 and October 2010, the number of employees involuntarily working part-time increased from 4.1% of all paid employees to 4.9% of all paid employees, rising 20% from 700,500 employees to 840,900 employees. If the hours these involuntary part-timers are not working are added to the unemployment rate, then the unemployment rate would have been 9.3% in October 2010.3

In addition to the increase in involuntary unemployment, the shift to more part-time work is a concern because part-time workers earn, on average, lower wages than full-time employees. In June 2011, the average hourly wage for a part-time employee was $16.33 compared to $24.09 for a full-time employee.4 For someone working 14 hours or less a week (nearly one-third of all part-time employees in October 2009), this works out to a maximum of $228.62 a week ($11,888.24 annually), well below the LICO for all regions and a poverty income if there’s no other household source of income. For someone working 14-29 hours a week (two-thirds of part-time employees in October 2009), this works out to a maximum of $473.57 a week ($24,625.64 annually), below the LICO for a family of 4 in any urban area. In June 2011, the average weekly earnings of part-time employees age 25 and older was $381.09.

In addition to the shift to a greater proportion of part-time work, the number of hours worked overall is still below the pre-recession rate – 574,218,000 in June 2011 compared to 578,657,000 in October 2008.5 This is due largely to the increase in part-time employment compared to full-time employment, but average full-time hours have also declined from 39.5 in October 2008 to 39.3 in June 2011.6

The recession also increased the proportion of workers in other unstable job categories. The number of permanent employees dropped by 439,200 (3.41%) between June 2008 (before the recession began) and June 2009 (in the middle of the recession). The gap has since narrowed to 205,400 in June 2011. Within the category of permanent employment, there has also been a shift between full-time work, which dropped by 235,000 between June 2008 and June 2011, and part-time work, which increased by 29,800 between June 2008 and June 2011. However, in June 2009 and June 2010, the number of part-time workers was greater than in June 2011, suggesting that there is a slow shift happening toward permanent part-time jobs becoming permanent full-time jobs.7 (See Table Three for Changes in Permanent and Temporary Work.)

Meanwhile, the number of temporary employees increased by 341,200 (16.92%) between June 2008 and June 2011, rising steadily each year. Within temporary employment, however, full-time work has increased at a faster pace than part-time work (17.45% vs. 15.9%).8 Temporary employees earned, on average, $17.70 an hour compared to an average of $23.66 an hour for permanent employees.9

Self-employment is a category that can sometimes be precarious, and certainly the recession created a growth in self-employment that likely was precarious, since it grew significantly during the first seven months of the recession. This prompted economist Erin Weir to ask “whether more Canadians are becoming self-employed voluntarily or because they cannot find jobs paid by an employer.”10 Between June 2008 and June 2009, self-employment increased to 2,688,000, a rise of 2.9%. As employment has recovered, self-employment has declined to 2,671,000 in June 2011.11

1. 1. Canadian Economic Observer, Table 5.1-1, “Labour force statistics — Employed,” July 2011 and October 2010 issues, http://www.statcan.gc.ca/pub/11-010-x/2010010/t019-eng.htm.
2. 2. Statistics Canada, Labour Force Survey data in “The Daily,” November 7, 2008 and July 8, 2011, http://www.statcan.gc.ca/dai-quo/index-eng.htm.
3. 3. Jason Gilmore and Sebastien LaRochelle-Côté, “Inside the Labour Market Downturn,” Perspectives on Labour and Income, Statistics Canada, February 23, 2011, http://www.statcan.gc.ca/pub/75-001-x/2011001/pdf/11410-eng.pdf, p 11.
4. 4. Statistics Canada, “Average hourly wages of employees by selected characteristics and profession, unadjusted data, by province (monthly) (Canada), Summary Tables, June 2011, http://www40.statcan.ca/101/cst01/labr69a-eng.htm.
5. 5. CEO, Table 5.1-1, July 2011 and October 2010.
6. 6. Statistics Canada, “Table 7: Average usual hours and wages of employees by selected characteristics, Canada, unadjusted for seasonality,” in Labour Force Information: June 12-19, 2011 and Labour Force Information: October 12-18, 2008, http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=71-001-X&lang=eng.
7. 7. Statistics Canada, “Table 7: Average usual hours and wages of employees by selected characteristics, Canada, unadjusted for seasonality,” in Labour Force Information: June 12-19, 2011; Labour Force Information: June 13-19, 2010; Labour Force Information: June 14-20, 2009; and Labour Force Information: June 15-21, 2008, http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=71-001-X&lang=eng.
8. 8. Ibid.
9. 9. Statistics Canada, “Average hourly wages of employees.”
10. 10. Erin Weir, “Do-It-Yourself Recovery,” Relentlessly Progressive Economics Blog, May 8, 2009, http://www.progressive-economics.ca/2009/05/08/do-it-yourself-recovery/.
11. 11. Canadian Economic Observer, Table 5.1-1, “Labour force statistics — Employed,” July 2011 and July 2010 issues, http://www.statcan.gc.ca/pub/11-010-x/2010010/t019-eng.htm.