Deteriorating Wages for Part-Timers

The Global Labour University are publishing an interesting series of Global Labour Columns. The most recent by Patrick Belser – author of the ILO Global Wage Report – looks at the impact of the Great Recession on wages.

http://column.global-labour-university.org/2010/01/why-we-should-care-about-wages.html

“Focusing on unemployment rates alone understates the true extent of the deterioration of employment and conditions of work in labour markets. Everywhere, the crisis has led to cuts in working time, which has damaged the living standards of workers and their families. In the 27 member states of the European Union, full-time employees work about three-quarters of an hour less every week than they did before the crisis. In the US, weekly working time for production and nonsupervisory workers has fallen by about half an hour. These average changes may seem relatively small because not everyone was affected, however, for those who were hit, the cuts in hours have often been severe. Similar trends have been observed elsewhere and, globally, the number of involuntary part-time workers appears to have increased. The result, in most cases, has been a fall in take-home pay for workers at the end of the month. Figures collected at the ILO for 53 countries show that in 2008 real monthly wages (i.e. wages adjusted for inflation) fell in one quarter of all countries. In most other countries, particularly developing countries, wages continued to grow but at a much slower pace than before the crisis. The situation is likely to have been even worse in 2009, given the quarterly figures already available and the increase in the supply of unemployed people looking for jobs.”

In Canada, there has been a modest but not trivial cut in average working hours – from 35.1 to 34.9 hours between December, 2008 and December, 2009. (Labour Force Survey data, not seasonally adjusted.)  The average hours of part-timers have been especially impacted – down from 17.1 to 16.9 hours over the same period. Hours of full-timers fell slightly from 39.3 to 39.2.

Changes in hours combined with changes in average hourly earnings mean that, between December, 2008 and December, 2009 – average weekly earnings of full-time workers rose by a modest 2.25%, while average weekly earnings of part-timers rose by just 0.9%, likely  slipping slightly below the  inflation rate which was 1% in November.

Over the last year, the part-time rate (seasonally adjusted) rose from 18.6% to 19.0%, driven by a jump from 45.5% to 46.8% among youth, and from 7.0% to 7.9% for men aged 25 and over. (The rate fell for women  aged 25 and over.)

In sum, on top of the jump in unemployment, we have seen not just a shift to part-tie jobs, but also signs of slippage  of real wages for Canadian part-timers.