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Is precarious work really as bad for the economy as everyone says it is?

Josh Holinaty

Okay, hop up on the examining table and let’s take a look. Have you been working out? Because these unemployment readings are the best I’ve seen in over 40 years.

Recent improvement in full-time jobs. Prime-age workers looking good. Now, you might want to watch out for wage inflation—that’s always a concern for labour markets in your condition—but other than that you’re fit as a fiddle. If all my patients were in this shape, I’d be out of business.

Despite plenty of good news from the exam room, no one seems prepared to accept any upbeat diagnoses for Canada’s labour market. Instead of basking in our own good health, we’ve become a nation of hypochondriacs—convinced we’re suffering from some rare and exotic workplace ailment known as precarious (a.k.a. temporary and contract) employment. It’s time to snap out of it.

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In the wake of the Great Recession, analysts seem to have agreed an outbreak of precariousness is our labour market’s biggest problem. Employers, we’re told, have given up on full-time positions.

Workers are getting trapped in ghettos of part-time or contract work lacking benefits or stability.

There’s even talk of a “precariat,” as if a legion of temp workers are on the verge of achieving full-blown class consciousness.

And so, in spite of all the good news flowing from the labour market—including some healthy signs of wage growth—governments are obsessed with curing precariousness. The most visible response has been a wave of higher minimum wages sweeping across the country. Some provinces are also giving temporary or part-time workers new rights and protections equivalent to what full-timers enjoy. And don’t forget ongoing debates regarding new government mandates for pharmacare, child care, dental care and universal income—all motivated by claims taxpayers have a responsibility to shelter workers from the uncertainties of the gig economy.

Despite this sense of crisis, precariousness is not an issue that poses a threat to the labour market writ large. And all those recent government remedies—higher minimum wages, higher taxes and reduced labour-market flexibility—are only going to make things worse for young people trying to get their first break.

Any lucid look at precarious work must begin with a recognition that the vast majority of part-time and temp work in Canada is a freely made choice. More than three-quarters of workers who are employed part-time say they chose to be, in order to accommodate school, home life or other obligations. Just 24% of part-time workers, according to Statistics Canada, cite an inability to find full-time work as the main reason for their part-time status. For older workers, part-time or contract work can ease the transition out of the workforce. Self-employment can also be a way of achieving a better work-life balance. None of these are problems requiring a government-mandated solution.

Further, if sudden growth in part-time or temporary work is what’s driving current anxiety about precariousness, our concern is about 20 years too late.

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Statistics Canada data shows the part-time share of total employment hasn’t budged since 1993; it’s holding steady at slightly less than 20% of the labour force. And the share of temporary or contract work has grown a mere 2% over the past two decades. So why all the recent attention?

While precarious work is generally a non-issue for much of the adult workforce, it is an issue for Canada’s youngest workers.

Research by the Chartered Professional Accountants of Canada published earlier this year reveals the only group to show any noticeable increase in part-time work since 1993 is the 20-to-24 age category, with young women increasing their share by almost 10% and young men by 5%. Plus, non-standard work of all kinds is concentrated in education, food and accommodation services, and the information, culture and tourism industries, all of which tend to attract green employees.

There’s never been a debate that young workers have the toughest time finding jobs. They have the weakest connection to the labour market, the least experience and the lowest productivity. From an employer’s perspective, inexperienced workers will always be the last hired because they represent the riskiest form of labour investment. Often the best way for young workers to get a foot in the door is through non-standard arrangements like part-time or contract work, or by offering their services at a lower cost than other workers. You can call that precarious—or you can call it working your way up from the bottom.

Yet in the name of eradicating precariousness in the broader labour market, provincial governments are deliberately frustrating the school-to-work transition by hiking minimum wages. This offers a clear benefit to workers who already have jobs, while making conditions harder for those in search of their first positions.

A Bank of Canada study released last year in the wake of the numerous provincial plans for higher minimum wages concluded such moves have “a significant negative effect for younger workers.”

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New labour standards meant to put precarious workers on equal footing with their full-time peers have the same result. Ontario’s new labour law, for example, raises statutory holiday requirements, creates new vacation and emergency-leave obligations, and requires part-time and full-time workers be paid the same for the same tasks. Forced to choose, employers will inevitably favour seasoned full-timers over rookie part-timers, further disadvantaging the very people hoping to use flexible forms of employment to ease their way into the workforce.

In trying to cure the dubious condition of precariousness, governments are inflicting pain on those who really need their help—young, vulnerable workers. This medicine not only tastes bad, it doesn’t work.

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