For years, Eileen Hasselhoff enjoyed her steady job as a cashier at a Toronto fast-food restaurant. She didn’t earn a lot, typically minimum wage, but at least she had regular hours that let her plan her life and save a little for retirement.
That all changed a few years ago. Suddenly her hours were cut, her schedule thrown into turmoil and her income slashed. Now sometimes, she gets 15 hours a week. Other times, 12. Often she’ll get a last-minute call from her manager asking her to come in earlier, or stay later. She has no guaranteed minimum hours, her savings have evaporated and she’s lucky if she can pay her bills.
“I know I should be happy I have a job. But I’ve done a lot of inner thinking, and I keep asking myself why?” she says.
Ms. Hasselhoff is one of nearly a million Canadians who work part-time when they’d prefer full-time hours. Many have seen opportunities for traditional, full-time jobs with benefits fade, to be replaced by part-time or temp positions without health benefits or pension plans.
This type of unsteady or precarious work is a quieter or less visible trend in Canada’s labour market, where muted job creation tends to grab most of the attention. But the growing number of reduced-hours and part-time positions, defined as less than 30 hours a week, as well as contract jobs, have widespread effects, not just for personal finances but for consumer demand and economic growth as a whole.
For employers, more flexible staffing allows them to keep a lid on labour costs, improving their margins at a time of heightened competition and changing business models. It lets them be nimble in an era of fluctuating demand.
But for workers, the shift to a just-in-time labour market creates a host of difficulties for long-term planning, eligibility for jobless benefits, and often results in a diminished ability to save. Erratic hours create challenges in pursuing an education, arranging child care and qualifying for a mortgage.
Part-time work accounted for 80 per cent of net job creation in the past year and the share of people in part-time positions stands at 19.3 per cent, a percentage point higher than pre-recession levels. Back in 1976, that figure stood at 12.5 per cent.
Plenty of part-time positions are great, regular jobs. And many people, especially older Canadians, choose part-time work by choice, not necessity.
But not all. The share of involuntary part-timers rose in the recession and remains elevated.
The greatest portion of involuntary part-timers are those between the ages of 25 and 54, men and women in their prime working years, according to data compiled by Statistics Canada. Temp work, defined as jobs with a fixed end date, has grown to 13.4 per cent of the work force from 11.3 per cent in 1997, those figures show. And within the temp category, contract positions have increased the most, up 83 per cent to 1.1 million people since 1997. Statscan has noted that temp workers tend to see lower pay, fewer benefits and less on-the-job training than permanent staff.
The tilt to unstable work – temp jobs, shift work or erratic part-time positions – shows “these are not the 1970s jobs any more. There’s no sense of permanence to them. That’s the area that’s really changing – the lack of commitment by employers to employees in the long term,” says Wayne Lewchuk, professor at McMaster University’s economics and labour studies departments.
In prior decades, workers were seen as investments for companies, an asset to be developed over the long term. Now, he says, they’re often viewed as a liability or a cost to be minimized whenever possible.
“The reality is, our economy is much more competitive now than it was 40 or 50 years ago. It’s a brutal world out there if you’re a firm, and so they are looking for ways to cut costs. … So we’ve seen a movement of firms to protect a core [of employees] and surrounding that with a periphery of less permanent employees or tasks that are contracted out,” Prof. Lewchuk says.
He has surveyed 4,000 people in the Greater Toronto and Hamilton area and found that nearly half now work in jobs with some degree of insecurity – from short-term contracts to self-employed, working for temp agencies or without benefits.
That has clear consequences for finances, his research has found, but the impact also spills into family, health and community involvement.
The trend also has implications for demand in the broader economy. A worker on irregular hours, or on a six-month contract, is less likely to make major purchases and shore up savings, and more likely to delay forming relationships, buying homes or starting families. “It’s logical that people put the brakes on those aspirations,” Prof. Lewchuk says.
It’s not just low-wage workers who are being affected. He has found “it’s creeping into middle-income occupations too,” with insecure work growing in the arts, education, health care and information technology sectors, in both the private and public sectors.
Rubeni, 41, a single mother in Toronto who asked that her last name not be used to avoid jeopardizing employment chances, worked on call for several years at a daycare and an after-school program. Her hours varied between six and 35 hours a week. The variability created havoc at home, where sometimes she’d have to wake her seven-year-old son up at 6 a.m. to get him to daycare before starting her own shift at a daycare, 45 minutes away. In months when hours are thin, she’s been late paying rent and incurs a $45 penalty. “It’s a stressful life,” she says.
The rise of non-standard work isn’t unique to Canada. It’s growing in many developed nations, sparking much public debate. In the United Kingdom, the growth of “zero-hour contracts” means there’s no obligation for companies to offer even minimum working hours. In the United States, fast-food protests have sprung up across the country to demand better pay, while retail workers have launched campaigns against “just-in-time” work scheduling. Many Group of 20 countries are seeing deteriorating job quality and stagnating real wages, which in turn is constraining economic growth, according to an Organization for Economic Co-operation and Development study released last month.
Some countries, such as Australia, have adjusted policies to fit the new reality, and to protect workers from the harshest effects of an on-call labour market – which may offer lessons for Canada.
‘Labour when they need it’
For employers, a work force that expands and contracts with the ebbs and flows of demand is a way to keep labour costs down, especially in the services side of the economy, where a majority of Canadians work.
Temp jobs have become more prevalent at employers that have finite projects, such as in engineering, and for junior positions, says Rowan O’Grady, president of Hays Canada, a recruitment firm. The other area is in unpredictable environments, where it’s hard to gauge demand. “They don’t know how many people they’ll need or how busy they’ll be, and they can respond quickly, without carrying the cost of having a bench of people sitting there, waiting for work to come along.”
New technology is also making it easier to adjust staffing, with laser-like precision, to fit demand. Scheduling software can detect when to staff up as the coffee shop gets busier, or when to reduce hours as the grocery store empties.
OTHER COUNTRIES’ SOLUTIONS
Several countries have introduced policies that aim to balance the need for a flexible labour market with better security for workers. Here are some measures:
Denmark is known for both high productivity and a flexible labour market, meaning it is relatively easy to hire and fire people. But under its “flexicurity” approach, workers who lose their jobs have a stronger safety net – workers receive more generous jobless benefits and have better access to job training and skills upgrading.
Australia has a higher minimum wage of $16.52 (Canadian) an hour. Casual workers are entitled to extra pay of about 25 per cent to make up for a lack of sick leave and other benefits. The country also has a federally-funded Fair Work Commission, an independent workplace relations tribunal that sets a safety net of minimum wages and work conditions and helps resolve disputes.
Part-time work is prevalent in the Netherlands, especially among women, but even most part-time workers are eligible for benefits. This means they are covered for jobless benefits, pensions and leaves, similar to full-time workers, at rates that are proportionate to the hours they work.
Kronos, a U.S. work force management company, offers one such service. Its Workforce Ready solution, available in Canada, lets businesses “control labour costs, minimize compliance risk, and improve work force productivity” using real-time employee data.
Kronos didn’t respond to requests for an interview, but its website has video testimonials from several Canadian employers who say this software made scheduling easier, more automated and helped trim labour costs.
But these lean staffing strategies might not pay off for companies in the long run, says Zeynep Ton, adjunct associate professor at the MIT Sloan School of Management who has studied retail operations. “It hurts them a lot more than what companies may realize.”
Unpredictable scheduling “is just one part of the bad jobs umbrella,” which together mean “employee morale is lower, turnover is higher, workers are not engaged, they make more errors and they’re not as productive.”
All this reduces sales and profits, she has found – so companies reduce their labour budgets, and then they can’t invest.
The growth of a “just-in-time work force” as labour economist Jim Stanford puts it, reflects the view that labour is a flexible input to production – used and disposed of when not needed. Technology, he says, is tipping the balance of power in the employers’ favour, “opening up more opportunities for them to hire labour when they need it with no responsibilities or guarantees.”
This may work in a labour market with an excess supply of job seekers who are hungry and desperate for work. “But there are constraints in this strategy – retention is one, and if you’re treating people like a disposable input, you’re not going to elicit a lot of loyalty and creativity,” says Mr. Stanford, an economist at Unifor, Canada’s largest private sector union.
Both Target Canada and Loblaw have come under fire from workers for cutting hours. Neither company responded to a request for comment Friday.
So has IKEA, where workers in Richmond, B.C., have been off the job for more than a year in a dispute partly over hours and scheduling. Several hundred part-time workers are facing either the prospect of scaled-back hours or no guaranteed minimum hours per week.
Keifer Winkelmans, 22, who worked in the restaurant, says it was impossible to juggle fluctuating hours, often on call, with going to school, where he was trying to upgrade his skills to enter the trades.
“At IKEA, both full-time and part-time roles are necessary to both address the cyclical nature of our business and to provide flexibility to employees through their various stages in life,” says Madeleine Lowenborg-Frick, a spokeswoman for IKEA Canada. “Part-time employees are an important part of our business and we pay them wages that recognize their contribution to the business.” As for the labour dispute; “IKEA has remained committed to reaching a collective agreement that provides wages and benefits that exceed industry standards and supports the long term success of the IKEA Richmond store.”
‘A 24/7 economy’
The overall labour market took a hit in the recession, but by 2011 it had recovered all of the jobs lost during the downturn.
But it’s an altered world. Long-term unemployment has stayed high and the job market for young people hasn’t improved. About 15 per cent of the work force calls themselves self-employed, many of whom face below-average or unsteady pay.
The Bank of Canada has highlighted several areas of weakness in recent months, from ebbing participation rates by young and prime-aged workers to the prevalence of involuntary part-time work, long-term joblessness and wage gains that are below historic averages. Taken together, there is more labour market slack, or underutilized human capital, than the unemployment rate suggests, Timothy Lane, the central bank’s deputy governor, said in a Sept. 24 speech.
A host of factors are eroding job quality. Globalization and competition has heated up. The labour market has become more polarized, with rich rewards for those with desired skills and diminished returns for workers elsewhere. And a larger pool of labour is hunting for scarcer opportunities.
“From one perspective – from those who think liberal labour markets are a strength – this is a dynamic economy,” says Dr. Cameron Mustard, president and senior scientist at the Toronto-based Institute for Work and Health. “But from the perspective of a 30-year-old, who is trying to maintain a household, has a young child and a partner who’s not in the labour force … and the person can’t find work that pays more than $15 an hour, that’s a problem,” particularly when there are no guaranteed minimum working hours.
We’ve moved to a “24/7 economy,” especially in the services industries, he says.
Evidence shows that unsteady work and economic insecurity hurts health. Lower wages make it more difficult for families to maintain good nutrition and afford decent housing. Rotating or irregular shifts are associated with more illnesses and fatigue. Temp work spells heightened risk of on-the-job injuries. Studies have shown people who are in their first 30 days of work, especially in places like warehousing, are at a higher risk of incurring a work injury.
Monica Mckenzie has worked irregular shifts for 11 years. The single mother works as a dishwasher at the Hilton Toronto Airport Hotel. Sometimes, she has had 40 hours of work, other times just 15. She’s used temp agencies to plug the gaps, at times cleaning hotels for up to 17 hours a day.
Helping her son through homework, or attending parent-teacher meetings, was often impossible. The worry over hours caused sleep loss, stress and migraines. “I cannot sleep at night,” she says. Her situation has taken a brighter turn – her hours have since stabilized, which she says has helped her health, and her son is now in his last year of college.
Union density, meantime, has dwindled. Canada’s coverage rate ebbed to 31.2 per cent last year, Statscan data show, down from 33.7 per cent in 1997. Wages also reflect how the balance of power has shifted. Pay hikes from major settlements between unionized staff and employers fell to the lowest level since 1997 last year, averaging 1.4 per cent. Average hourly wages for all workers are barely keeping up with inflation.
At the same time, wage trends are splintering, with those in top occupations, such as managers or finance professionals, seeing above-average gains and those in low-wage occupations, such as cashiers, seeing little improvement in real terms.
A disproportionate number of low-wage earners are immigrants. As of last year, recent immigrants were three times as likely to be minimum wage earners as Canadian-born workers, according to Statscan.
Yaa Nimako has worked part-time and on-call work for months. It’s not due to a lack of qualifications: She has two masters degrees and 20 years of teaching experience in the U.S. and in Ghana, her home country. One job teaching English as a second language gives her 3.5 hours a day, another is on call. But she needs more hours.
“Of course, the salary is not enough for me and my family,” says Ms. Nimako, a single mother who wonders whether employers aren’t recognizing her experience outside of Canada.
Overall wages in Canada have risen by $12.59 a week since 2010. But for restaurant workers – the lowest-paid in the country – wages have fallen by $13.55 a week, according to Statscan payrolls data compiled by the Canadian Labour Congress.
Jonethan Brigley, 27, is one such worker. He works full-time at an A&W restaurant in Dartmouth, N.S., prepping, making fries, working the grill. His boss makes the schedule on the weekends, and his hours and days change, often ending at 11 pm. He can’t afford transport, so he bikes home – and worries about the danger – late at night. If he gets two days off in a week, they are not consecutive.
He’s one of the working poor – despite his full-time status, he lives on a minimum wage of $10.40 an hour and occasionally has to visit the food bank. He would vastly prefer more regular hours. He, too, can’t save. “After paying for rent, basic food and all the other bills, I don’t really get anything for myself,” Mr. Brigley says.
‘If you invest in your people …’
One way to bring back good jobs would be a sustained pickup in demand. As the pool of available workers shrinks, employers will have little choice but to compete for workers, which – in the past – has meant stronger benefits, better pay hikes and more steady hours.
Even now, not all employers take the same approach. Costco guarantees its part-time staff a minimum of 25 hours a week (with some exceptions depending on provincial regulations) and also posts its work schedules two weeks out from the workweek. About half of its near-30,000 Canadian staff are part-time, and they’re eligible for partial benefits, sick pay and pensions. It also pays its Canadian workers wages that are above the average for the sector.
Costco and several other retailers including Trader Joe’s in the U.S. show the business benefits of treating staff well, says Prof. Ton of MIT, who has compiled case studies of companies that see workers as “strategic assets” rather than liabilities. “If you invest in your people, and complement that with a great work design so that people are productive and can do work without making errors … the result is better jobs, higher customer service, lower prices and great returns to shareholders.”
Several provinces, such as Ontario and Nova Scotia, have raised minimum wages this year, to between $10 and $11. Some campaigns are calling for further hikes, to $15, a level that the NDP has proposed for federal workers. Some economists say minimum wage hikes do little to alleviate poverty and may discourage hiring, while other studies have shown little impact on jobs and benefits for the working poor.
A system of proportional benefits, so that even part-time workers have better protection, would help workers, Mr. Stanford says. And employment insurance should be adjusted to fit the new reality, making it easier for workers to qualify for jobless benefits, he says.
In fact, Canada ranks below its peers in terms of jobless benefits, according to OECD senior economist Alexander Hijzen, who has studied job quality across countries.
Many minimum-wage workers, such as Mr. Brigley, simply say they need better pay so life isn’t such a struggle. But even higher wages won’t do much good if people don’t get more hours, preferably steady ones.
“I would like full-time hours,” Ms. Nimako says. “And the chance to get a paycheque at the end of the week and know that I earn so much … rather than wait and hope to be called, with all the hope and stress involved.”