Canada’s Job Quality Down At All Fronts, Says CIBC Study

Job quality in Canada is at a record low and there is no sign of a turn-around in the immediate future. This was stated in the findings of the Canadian Employment Quality Index, compiled by Canadian Imperial Bank of Commerce. The Index was complied after measuring the quality of employment from a compensation perspective.

The study noted that the decline in all labour measures has confirmed a decline in Canadian job quality with the cause being more structural than cyclical. Benjamin Tal, deputy chief economist and author of CIBC’s Employment Quality Index said the EQI measured three key areas:

· Distribution of part-time vs. full-time jobs

· Self-employment vs. Paid employment

· Compensation for full-time jobs in more than 100 industry groups

A report by Toronto-Dominion Bank in January had also pointed to some systemic weaknesses that were affecting the unemployment rates.

Low Paying Jobs

The CIBC index noted the sharp rise in the number of part-time positions compared to full-time jobs, ever since the 1980s. Self-employment is another feature that is adding to low paid jobs compared to salaried employment. The number of self-employed workers has been on a “steeper incline” over the past 25 years, with 2014 showing a clear spurt, with a four times jump compared to paid employment, the CIBC report said.

On the compensation front, the bank noted that low-paying full-time jobs have risen faster than mid-paying jobs, which rose quickly than high-paying jobs. In 2014, “the job-creation gap between low- and high-paying jobs widened,” with low-wage full-time paid positions rising at double the pace of high-paying jobs.

The retail sector, despite its low-paying nature, has been a big source of employment in Canada. But that industry is in doldrums and marked by erosion of opportunities and job losses, as has been highlighted by the exit of Target and retailers like Sony, Smart Set and Mexx from the Canadian market.

However, Tammy Schirle, economics professor, Wilfred Laurier University, questioned the assumption that part-time work is of poor quality than full-time employment. She noted that employers offering flexible work schedules are praised for accommodating work-life balance. “We rally behind startups, innovators and the ambitious small-business owner, and then say the work they’ve created is substandard?” she asked.

Minister Disagrees

However, Federal Employment Minister Pierre Poilievre disagreed with the the CIBC findings. In a statement, the Minister said Canada’s job creation record is one of the strongest in the Group of Seven. “Given the ongoing uncertainty in the global economy, it is important that our government continue to keep taxes low for families and job creators,” he said.

Meanwhile, Huffington Post reports that Canada’s job market is not that bad as is being made out in some reports. It said the latest numbers released by StatsCan are a proof of it. The agency’s Labour force survey, released in January had found that Canada lost 4,300 jobs in December 2014. But it added 21,800 jobs in January. The survey, based on payrolls of companies, revealed that the main sectors of job growth were natural resources and energy.

Despite depressed oil and commodity prices, the mining, oil and gas sector was able to add 1,200 jobs in December 2014, and the total number of jobs was up by 3.1 percent compared to 2013. Even in Alberta, despite the slowdown, there was job growth, as recorded at the end of 2014, with 70,000 jobs added in 2014. It was the fastest rate in job creation vis a vis other provinces.

Atlantic provinces were ahead in wage growth with wages in Newfoundland recording the largest jump, with a 4.4 percent spurt in the whole of 2014. New Brunswick, P.E.I. and Nova Scotia showed a wage growth that was above the national average while Canada’s largest provinces Ontario, Quebec and B.C had a wage growth that was below the national average.

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