A person walks past closed storefronts in Toronto, on April 16, 2020.Nathan Denette/The Canadian Press
Politicians of various partisan stripes have repeatedly reassured Canadians about the coronavirus pandemic with an appeal to solidarity, the comforting thought that we are all in this together.
That may be true about the health challenges the country faces. But when it comes to how Canadians have fared through the ensuing economic crisis, the past six months have been anything but a common experience of suffering. Gender, parental status, income, race and even the type of workplace: All of those categories have created a fault line running through the economy, as the most recent labour force data make clear.
On one side are those who suffered small setbacks but bounced back relatively quickly. In some cases, those fortunate workers are better off than when the pandemic and lockdown first happened. But on the other side of the divide are workers who suffered more, and recovered less – with further gains perhaps stalling.
“The labour market impact of the pandemic has been incredibly unequal,” said University of Waterloo economist Mikal Skuterud, adding that the severity of those effects will leave economic scars for years to come.
For the most part, it will be those who were already at a disadvantage heading into the pandemic that bear the brunt: the lower-paid, women and racialized workers, particularly those who are self-employed. That reality points to the need for a smooth transition from emergency benefits to income supports, said David MacDonald, senior economist with the Canadian Centre for Policy Alternatives. “To continue that support needs to be the most critical public policy question in the next month or two,” he said.
On Thursday, Bank of Canada Governor Tiff Macklem flagged the risk that the uneven impacts of the coronavirus poses to the broader economy, saying potential growth will suffer if women, younger and low-wage workers become discouraged and exit the labour force.
Prof. Skuterud said there is a balance to be struck between providing support to those disadvantaged workers and their families, and not discouraging them from looking for opportunities to re-enter the work force. “There’s something to be said for keeping people on their toes,” he said, adding that the federal government’s proposal to extend benefits for a year risks upending that balance.
Gender
Women fared substantially worse than men at the start of the pandemic, a fact that gave rise to the phrase “she-cession.” In April, as lockdowns spread from female-dominated sectors such as hospitality to more male-dominated areas such as construction, that gap narrowed somewhat. That month, men saw their aggregate hours worked – a measurement that takes into account both unemployment and reduced work – fall by 31.3 per cent compared with February, not much better than the 34.4-per-cent decrease for women, as the chart below (from data compiled by Prof. Skuterud) shows.
But that gap has started to widen again, according to the most recent data. In August, men’s seasonally adjusted aggregate hours were down 9.7 per cent compared with February. While still substantial, that was an improvement from July, when aggregate hours were 11.7-per-cent lower than in February.
Women did not see such gains, however. Their aggregate hours remained essentially flat, down 13.2 per cent in July compared with February and down 13.1 per cent in August.
Part of that gap can be explained by the retail and hospitality sectors, still struggling to adapt to health restrictions and dropping demand. But only part.
Parental status
Children are another part of the answer. Women are at a disadvantage compared with men, but an even more noticeable split emerges between mothers and fathers. As the chart below shows, fathers saw an initial steep drop in hours worked in the early days of the pandemic.
But by August, dads with teenagers had largely rebounded from those losses, and those with children aged 18 to 24 were actually working more, with a 1.7-per-cent increase between February and August. Meanwhile, men with younger children were slightly worse off, particularly those with younger school-aged children between the ages of 6 and 12. Aggregate hours worked in August for that group of men were still down 10.7 per cent from February.
But those fathers were nevertheless better off than mothers with children in the same age range, as this second chart shows. Whatever the age of a child, mothers lost more ground in the labour market in April and had made up less of that loss by August. That gap was most pronounced in households with very young children, possibly a reflection of parents deciding to keep their offspring at home rather than in daycares. Aggregate hours worked by mothers of children under 6 were still down 17 per cent in August; for men, that figure was a drop of just 4 per cent.
Income
One of the biggest, and perhaps unsurprising, divides is that of income. Lower-paid workers lost more jobs and more hours of work than those with higher pay, partly a reflection of the lockdown of the lower-wage services sector and the ability of higher paid professionals to work from home.
But the magnitude of that divide is revealing. For workers earning around minimum wage, paid $14 an hour or less, 23 per cent either lost their job by August or saw their hours cut by more than half. Workers in the middle of the wage scale, with an hourly rate between $25 and $28, fared better, with just 7 per cent unemployed or losing more than half of their hours.
But for the highest paid workers, the recession had come and gone by August. The top two income categories, those earning between $40 and $48 an hour, and more than $48, did experience a loss of jobs and hours worked in the early days of the pandemic. But they quickly rebounded from those relatively small losses, as the chart below indicates. For those earning $48 an hour or more, 4 per cent more were employed or worked more than in February, before the pandemic shut down the economy. The second-highest income category fared nearly as well, still better off than in February. Both stand in stark contrast to the continuing economic pain of lower-paid workers.
Employer type
Like higher paid workers, public sector employees have been relatively insulated from the effects of the coronavirus-induced economic downturn. In the public sector, just 6 per cent of workers had lost their jobs or the majority of their hours by August, compared with February, as the chart below shows. Private-sector employees were nearly twice as hard-hit, with 11 per cent losing employment or most of their hours.
Workplace divide
Seasonally adjusted percentage change in employment and hours of employees working at least a half week, from February to August
Public employee
-6%
Private employee
-11
Self-employed
incorporated,
with paid help
-18
Self-employed
incorporated,
no paid help
-22
Self-employed
unincorporated,
with paid help
-26
Self-employed
unincorporated,
no paid help
-17
Unpaid
amily worker
24
THE GLOBE AND MAIL, SOURCE: CANADIAN CENTRE
FOR POLICY ALTERNATIVES
Workplace divide
Seasonally adjusted percentage change in employment and hours of employees working at least a half week, from February to August
Public employee
-6%
Private employee
-11
Self-employed
incorporated,
with paid help
-18
Self-employed
incorporated,
no paid help
-22
Self-employed
unincorporated,
with paid help
-26
Self-employed
unincorporated,
no paid help
-17
Unpaid
amily worker
24
THE GLOBE AND MAIL, SOURCE: CANADIAN CENTRE
FOR POLICY ALTERNATIVES
Workplace divide
Seasonally adjusted percentage change in employment and hours of employees working at least a half week, from February to August
Public employee
-6%
Private employee
-11
Self-employed incorporated,
with paid help
-18
Self-employed incorporated,
no paid help
-22
Self-employed unincorporated,
with paid help
-26
Self-employed unincorporated,
no paid help
-17
Unpaid family worker
24
THE GLOBE AND MAIL, SOURCE: CANADIAN CENTRE FOR POLICY ALTERNATIVES
The self-employed – a category that includes those who toil on the front lines of the gig economy – lost more ground than employees in either the public or private sectors. Worst off of all were the self-employed who had paid help but were unincorporated: 26 per cent of that group had lost their jobs or more than half of their typical work hours by August.
Race
In July, Statistics Canada began collecting detailed data on race in the monthly labour force survey, an acknowledgment of the uneven economic impact of the coronavirus, the agency said. (Indigenous people are not part of this new effort; the agency already collects data for off-reserve individuals.)
Its early findings, shown in the chart below, back up that belief.
All of the non-white racial groups surveyed by Statscan experienced much higher levels of unemployment than their white counterparts. In July, South Asian and off-reserve Indigenous workers were at the greatest disadvantage, with unemployment rates of 17.8 per cent and 17.7 per cent that month, compared with just 9.3 per cent for white Canadians (none of the figures are seasonally adjusted). Filipino workers were at the narrowest disadvantage in July, with an unemployment rate of 13.2 per cent – still close to a four percentage point gap with white Canadians.
The picture was much the same in the labour force survey for August: White Canadians held steady with unemployment at 9.4 per cent. Arab Canadians were at the widest disadvantage, at 17.9 per cent, but every racialized group fared substantially worse than white Canadians.
Sheila Block, senior economist with the CCPA, said much of the racial gap can be explained by the overrepresentation of racialized workers in the low-paying jobs of the services sector, where revenue has plunged because of the public-health concerns from the coronavirus. But that does not mean that race is irrelevant, Ms. Block said. Systemic racism is a major reason why there is an overrepresentation of racialized people in those lower-paying jobs to begin with, she noted.
To help address the racial gap, Ms. Block said, governments should focus on policies that “raise the floor” at the bottom of the labour market, including increases to minimum wage, paid sick days, extending eligibility for unemployment benefits to gig economy workers and establishing a minimum amount for those benefits. (The federal Liberals are proposing such steps for unemployment benefits as part of revamped income supports.) The private sector has a role to play in the longer term as well, she said, by using employment equity to offset systemic racism in hiring and promotion decisions.
Tax and Spend is a weekly series that examines the intricacies and oddities of taxation and government spending.
Patrick Brethour