More Canadians in low-paying jobs

flovestock

tavia grant
Globe and Mail Blog
Posted on Wednesday, January 25, 2012 7:05AM EST

Underpaid or out of work? You're not alone.

Employment quality in Canada deteriorated last year as more people moved into self-employment and the composition of the labour market tilted towards lower-paying positions, a new report says.

Canada's labour market was lopsided last year, with virtually all of the country's job growth in the first half of the year. The pace slowed considerably in the last six months, and the quality of work worsened, notes CIBC in its employment quality index.

“The impact of a softening pace of job creation is exacerbated by a worsening level of job quality in the Canadian labour market,” the bank's economists say in their analysis to be released Wednesday.

That double-whammy hit the pocketbooks of Canadians. As both the quantity and quality of employment fell, “it is hardly a surprise that real disposable income was unchanged in the first three quarters of 2011 -- the worst showing in fifteen years,” they said.

While the index is well above levels through the recession, it has fallen by more than one percentage point in the past year.

The bank's index incorporates three measures: full-time versus part-time work; the mix of paid and self-employment, and wages among full-time jobs.

The first component tells the brighter side of the story: full-time employment rose 1.5 per cent in 2011, accounting for all the jobs created in the year. The number of part-time positions fell 0.3 per cent.

The other two components weakened. Self-employment rose 2 per cent last year, double the pace of growth paid employment. The rise in self-employment is “in many ways is now working to mask some of the softening in the Canadian labour market,” the report said, adding that, on average, a self-employed person earns 10-to-15 per cent less than a regular employee.

Meantime, the number of high-paying full-time jobs rose by just 0.4 per cent, a quarter of the pace of low-paying jobs such as those in accommodation services, restaurants and wood manufacturing. Some higher-paying sectors, like public administration and electronics manufacturing, saw a net job loss last year.

The picture varies considerably by province. The biggest drop in quality was in Ontario, followed by British Columbia. Alberta, meantime, is still generating “high-quality jobs at a rapid pace.”

Job creation has slowed to a point where the three-month average for employment is now weaker than in any non-recessionary period, the bank said.

In the coming quarters, employment quality will remain “subdued” as a cooling real-estate market dampens construction hiring and public-sector employment declines, the report said.