In addressing the future needs of a rapidly evolving labour market, Canada deserves considerable credit for rolling up its sleeves in the past few years and tackling some of the biggest challenges.
The country’s expanded, economic-focused immigration program is a key part of the solution in countering long-term labour supply pressures in an aging workforce. The federal government’s new Canada Training Benefit takes an important step toward continuous upgrading of training and education for workers to keep up with fast-changing skills needs.
But we’ve got a long way to go in one key policy challenge. The social safety net for workers is falling seriously behind the shifting nature of work. It’s a global phenomenon – but Canada is certainly among the countries that has some serious adapting to do.
A new report from the Organization for Economic Co-operation and Development says that “non-standard work” – self-employment, temporary employment, short-term “gig” work – is increasingly becoming the norm throughout the industrialized world. Among the OECD’s 34 member countries (which include Canada), 14 per cent of workers are self-employed; 18 per cent of employees are either on a temporary contract or working a short-term, part-time gig.
Canada is among the lowest in the OECD in self-employment, with just 8 per cent of Canadians running their own business. But temporary and short-term/part-time workers make up 23 per cent of Canadian employees, well more than the OECD average. Combined, these groups make up a substantial, and increasing, share of Canada’s workforce.
These non-standard workers, the OECD says, typically lack the same access to “social protections” that traditional employees enjoy.
“Social protection systems play a key stabilizing role in the current context of heightened uncertainties about the pace and extent of labour market changes,” the report says. “But accessing social protection can be especially difficult for workers in less secure forms of employment.”
Critically, it said, non-standard workers throughout the OECD countries are 40 per cent to 50 per cent less likely to get any income supports when they’re out of work as traditional employees.
In Canada, while the self-employed are required to pay into the Canada Pension Plan (and they receive its benefits), participation in Employment Insurance (EI) is entirely optional. The voluntary nature, the OECD report says, “often leads to low coverage.”
It’s important to remember that Canada’s EI program covers more than just unemployment. Workers can tap into it for maternity and parental leave, for sickness and injury leave, and for benefits for caregivers of ill or disabled family members.
There are, of course, other areas in which non-standard employees either trail traditional employees or are frozen out of protections entirely. With things such as pensions, health and dental benefits, and work conditions such as overtime and holidays, non-standard workers routinely get the short end of the stick.
Perhaps the most tricky issue coming out of the rise of non-standard employment is that of labour organization and collective bargaining. The OECD notes that non-standard workers are 50 per cent less likely to be unionized than traditional employees.
For any government concerned about addressing income inequality – as Canada’s current government says it is – this presents a significant problem. The decline of unionization in Canada (roughly 28 per cent of all workers are union members today, down from 38 per cent in the mid-1980s) may be a key factor in the income gaps that have emerged in this country. Average weekly earnings for Canadian workers who are either in a union or otherwise covered by a collective agreement are nearly 20-per-cent higher than non-union workers.
Collective bargaining is also instrumental in securing important benefits, pensions and job security for workers. The prospect of an increasingly large segment of the workforce falling outside the realm of traditional collective bargaining suggests that either innovations will be needed to secure collective powers for independent and non-permanent workers, or social programs will need to expand to help cover the gaps in their benefits.
The OECD’s data suggest Canada has more time than most to get on top of these issues. As we already noted, Canadian self-employment is still relatively low. The OECD pointed out that Canada’s workforce has less exposure than most in terms of the share of its jobs considered likely to be exposed to “significant change” from automation. Its youth unemployment is low relative to many advanced economies. In short, Canada’s vulnerable groups for precarious and non-standard employment aren’t hitting a critical point – yet.
But the trends tell us that the challenge of providing adequate supports for the non-standard workforce is only going to increase – and, potentially, quickly. More people are headed for this type of work in our future, and they will represent a constituency that policy-makers can’t ignore. Without changes, the OECD report says, “further increases in non-standard employment will have negative consequences for inclusiveness and equity.”