So far, Canada’s labour recovery has been speedy and robust.
Over the fledgling rebound, companies have added hundreds of thousands of people to their payrolls each month, many of them workers returning from temporary layoffs. In September alone, another 378,000 people were back at work, a result that blew past expectations on Bay Street. All told, Canada has recouped 76 per cent of jobs that were destroyed in March and April – a recovery that easily eclipses that of the United States.
Still, there are roughly 720,000 fewer people employed than in February. And the labour disruption was deeply uneven, with greater effects on society’s most vulnerable. As job growth naturally slows, and as the country grapples with a second wave of COVID-19 and restrictions on businesses, gaps between the haves and have-nots could persist or even widen over the fall and winter months.
“We’ve seen some [new] restrictions put in place – that’s going to result in job losses,” said Royce Mendes, senior economist at CIBC Capital Markets.
Six months from now, CIBC expects the total number of employed will be about the same – meaning, job growth is set to slow considerably.
“Some months you have small gains, some months you have small losses, and they roughly offset each other,” Mr. Mendes said. “I think the best we can hope for is an ebb and flow in the monthly labour market readings.”
Put another way, getting everyone back to work could take a while.
When it comes to the recovery, you can draw a clear dividing line by wage: $22 an hour.
For those earning less, job losses were widespread as the pandemic hit, and there’s still a significant portion of people out of work. For those earning more, the recovery is either complete or fairly close, according to an analysis from the Canadian Centre for Policy Alternatives, a left-leaning think tank.
The COVID-19 labour market can be broadly summarized: The more you earn, the less likely your employment was affected. In fact, employment in the second-highest wage decile ($40 to $48 an hour) is up a whopping 8.7 per cent, relative to February, before the coronavirus started spreading in Canada.
“There’s a group that has fairly good, stable incomes – they’ve gotten back to work. They’re not concerned about their finances in that respect,” said Tammy Schirle, an economics professor at Ontario’s Wilfrid Laurier University.
“Then there’s a second group, who really aren’t getting back to work yet, because the virus is really driving that part of the economy they work in. … That’s an ongoing concern for policy makers to pay attention to.”
The long-term jobless
Chronic unemployment has become much, much worse.
As of September, there were 1.33 million Canadians who said they wanted work, but had been jobless for more than six months, according to analysis from University of Waterloo professor Mikal Skuterud. It’s a staggering number next to past crises: Long-term joblessness is now 37 per cent higher than the peak after the 2008-09 recession.
The situation should improve in the coming months, Prof. Skuterud said. Still, for those in struggling industries, such as hospitality, chronic unemployment could extend well into 2021. That could present some troubles. There’s a body of research showing the longer you’re unemployed, the tougher it becomes to snag a job.
Will the same rules apply in this crisis? “In other recessions, when people have this long-term joblessness, it may signal something to employers about them,” Prof. Skuterud said. This time around, with mandated shutdowns of some industries, gaps in résumés “may not signal much at all.”
For decades, Canada’s labour data by race has been lacking. That is starting to change.
In its Labour Force Survey, Statistics Canada collected race-based data for the first time in July. With no historical data at hand, Statscan used an “experimental method” to gauge unemployment rates a year earlier. The results confirmed what many had expected, but nonetheless feared: Jobless rates increased more for racialized Canadians than whites.
There is progress being made of late. For instance, the unemployment rate of Black Canadians 15 to 69 dropped to 11.7 per cent in September from 17.6 per cent in August, unadjusted for seasonality. Most other groups had sizable drops as well.
Still, there remains a significant disparity with the white population, which has a jobless rate of 7 per cent, versus 11.7 per cent for racialized groups and 12.1 per cent for Indigenous Canadians. The Indigenous data also has a key caveat: It only pertains to the off-reserve population, and thus misses a large portion of Indigenous people. (Statscan does not collect on-reserve data, citing logistics challenges.) It’s likely a fair assumption the on-reserve population is suffering greatly through the pandemic. The 2016 census said the on-reserve jobless rate was about 25 per cent.
On the surface, it appears that women have nearly closed the employment gap. As of April, the worst month of pandemic job losses, women’s employment had declined 16.9 per cent since February, compared to a 14.6-per-cent drop for men. By September, women’s employment was down 3.9 per cent, while men were a shade better, down 3.6 per cent.
But there’s more to the story. Beyond simple metrics of employment, women’s work is being disrupted in other ways. As of last month, there were roughly 735,000 women who were employed, but worked less than half their usual hours – about 60,000 more than men in the same position. Of those women, nearly 540,000 worked zero hours in the September survey period (Sept. 13 to 19).
The current work climate is challenging for mothers. Statscan noted the number of mothers working less than half their usual hours in September was 70 per cent higher than in February, compared to a 24-per-cent increase for fathers.
“The way we are permitting child-care centres to shutter because they’re viewed as businesses, instead of social infrastructure, we are poised to set back women’s gains in the paid labour force by decades,” said Armine Yalnizyan, a fellow at the Toronto-based Atkinson Foundation. “That will have profound macroeconomic consequences.”
Young Canadians have experienced devastating job losses. To some degree, that’s expected: They not only have less seniority, but they also often accrue work experience in the retail and food industries, which have been clobbered by the pandemic restrictions.
Generation Z has a relatively pessimistic view of its prospects. Canadians 18 to 24 expect a labour recovery to arrive much later than older cohorts do, a recent Bank of Canada survey found. “If these expectations are correct, younger workers could face the risk of longer-lasting economic damage ... from being out of the labour force for longer,” the bank said.
Furthermore, Canadians 20 to 34 make up about 40 per cent of those who have been jobless for six-plus months and want work. (People who have never held a job before are excluded from the calculation.) Young people are "precisely the group you don’t want to be disengaged for a long time,” said Prof. Skuterud. “You want these people to be active labour market participants and taxpayers, because they’ve got a long time ahead in their lives.”
During the early part of the pandemic, job losses were steep for employees, but more muted for the self-employed. Things are changing.
As payroll employment has improved since April, the ranks of the self-employed have declined. Making matters worse, their work hours have been decimated. In September, the total number of hours worked by self-employed workers plunged 17.4 per cent from a year ago, compared to a 3.9-per-cent drop for employees.
In many ways, it’s a complicated trend. The Labour Force Survey reflects a worker’s main job. Thus, if someone lost their position at a company, but continued with a part-time freelance gig, they’d now be categorized as self-employed. This is perhaps why self-employment was lightly affected to start, said Andrew Fields, a labour market analyst at Statscan. It might also take longer for the self-employed to throw in the towel.
“When you’re let go from a business, it’s much more obvious than if you’re a self-employed person who’s simply going through a lull,” Mr. Fields said.
Employment has actually been stable for the self-employed who are unincorporated and without paid help. (This would include people picking up shifts with such services as Uber and Instacart.) Instead, those who are incorporated are suffering deep losses.
This “might reflect the greater struggle that smaller firms have been experiencing,” said Stéphanie Lluis, a University of Waterloo professor, in an e-mail. “They may face greater revenue and cost constraints than the unincorporated self-employed, who have more flexible options to stay employed.”
Alberta faces a long road to recovery. As of September, employment is down 5.4 per cent from February, second-worst among the provinces, and its jobless rate remains elevated at 11.7 per cent. Alberta’s economic slowdown will be among the worst in Canada this year, leaving the oil-rich province with a large hole to climb out of.
The outlook is hardly rosy. Oil prices have been walloped this year, delivering a hit to provincial finances and corporate balance sheets. Months after the pandemic started, the layoffs are still coming in the energy sector. Cenovus Energy Inc. said Tuesday it would cut up to one-quarter of its work force (or 2,150 positions) after acquiring Husky Energy Inc. Also this month, Suncor Energy Inc. said it was cutting up to 15 per cent of its employees.
If oil and gas prices rise next year, “that will flow into company profits," said CIBC’s Mr. Mendes. "But I’m not sure how much that’s going to flow back into hiring.”
Capital spending on new projects is a key source of job growth, he said. However, “I’m not sure in early 2021, even if oil prices are on the rise, that there’s going to be enough confidence among these [energy] companies to put money back into capital projects.”
After a deep initial hit, the services sector is on the mend.
As of September, services employment is down 3.6 per cent from February, while goods is down 4.3 per cent. Dig deeper and you’ll see why: Many white-collar industries have staged a full rebound, or close to it. The education, finance and tech-related industries are seemingly in good shape and were better positioned for the remote-work shift.
The outlook is undoubtedly grimmer in the hospitality space. Even before new partial lockdowns, restaurant bookings were on the decline in major cities – a bad omen for cooks, servers and bartenders. The same is true of hotels, with occupancy down severely in urban centres. Until the coronavirus is under control, there’s a chunk of the work force that simply can’t return.
Looking ahead, Mr. Mendes sees some areas for opportunity. “E-commerce and related jobs are going to benefit this winter. Not only the direct e-commerce job at the company,” he said. “You see warehousing jobs are actually above their pre-pandemic levels. There’s demand for that.”
The Globe and Mail
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