canadian job quality
sinks to record low: ciBc
OTTAWA — The quality of jobs in this country is fading fast, ac-
cording to a new report from CIBC.
Released on March 5, CIBC's latest employment quality index
noted job quality in Canada is now at a record low, showing declines
in all measures, but the drop in job quality is "more structural than
cyclical in nature and likely can't be reversed by monetary policy."
This mirrors the latest warnings from the Bank of Canada cau-
tioning that the headline unemployment rate is not as rosy as per-
ceived, added Benjamin Tal, deputy chief economist at CIBC and
the study's author.
"In many ways, the (Bank of Canada) has a point. Our measure
of employment quality is now at a record low, suggesting that the
composition of employment is suboptimal," Tal said. "But a closer
examination of the trajectories of our index's subcomponents sug-
gests that the bank's prescribed remedy of low and lower interest
rates might not cure what ails the labour market."
Since the 1980s, the number of part-time jobs has risen much
faster than the number of full-time jobs, which Tal explained is of-
ten seen as the most important measure of employment quality.
Another contributing factor is that self-employment versus paid
employment was also skewed. Over the past 25 years, the number
of self-employed workers has been on a steep decline, but in the last
year it grew at a rate of four times faster than the number of paid
employees.
"While full-time paid-employment jobs are on average of higher
quality than part-time and self-employment jobs, not all full-time
paid-employment jobs were created equal," Tal went on to say. "The
number of low-paying full-time jobs has risen faster than the num-
ber of mid-paying jobs which, in turn, has risen faster than the num-
ber of high-paying jobs."
CIBC's report also revealed that job quality has already taken a hit
in Alberta, falling three per cent by the end of December 2014. Sas-
katchewan and Manitoba have seen similar declines, with Ontario
falling by four per cent. However, British Columbia, the Atlantic
provinces and Quebec have seen an increase in quality.
There are implications for unions, Tal explained, saying the fast-
est growing segment of the labour market is also the one
with the weakest bargaining power.
"That works to weaken the link between
labour market performance and aggregate
wage gains," he added.
lAboUr brieFs
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