Today’s Job Numbers – The New Jobs are Bad Jobs

Today’s labour force survey shows an alarming deterioration in job quality and gives the lie to the idea that Canada has a very tight job market just because we have a low unemployment rate.

In May, we lost 58,000 paid jobs in the private sector, offset by a big jump in self-employment (up by 56,000.)  Fully two-thirds (69%) of the new jobs created since last December have come in the form of self-employment. Most self-employment positions are lower paid and less secure than the jobs of employees.

We lost another 12,000 reasonably well-paid manufacturing jobs in May, on top of the 19,000 manufacturing jobs lost last month. The pace of job loss in this sector is clearly accelerating as a result of the recent run-up in the value of the Canadian dollar. Meanwhile, we have lost 16,000 primary resource jobs (in forestry, fishing, mining, oil and gas) since December.

It is clear that the quality of the new jobs falls far short of the quality of jobs being lost due to industrial re-structuring. Strikingly, almost all of the growth in paid employment over the past year (226,000 out of 229,000 positions) has been in sales and services jobs. This is the lowest paid occupational category, where many jobs are part-time. One third of  the new jobs created since December have been in the lowest paid industrial category of all  – accommodation and food services.

Displaced industrial workers clearly face a huge hurdle in terms of finding new jobs of comparable quality. The situation is worst in Ontario. Here, 32,000 manufacturing jobs have been lost since December, but total employment in the province is up by just 21,000, and all of these new jobs were in accommodation and food services (up by 26,000.) The picture is only a bit brighter in Quebec, where 31,500 manufacturing jobs have been lost to date this year, but the rate of job creation overall has been a bit higher.

With a 6.1% unemployment rate, many believe that the Canadian economy is operating “above capacity.” The Bank of Canada is planning to raise interest rates soon, and the federal government is expanding its temporary foreign worker program.

Yet the figures clearly indicate that the quality of the new jobs is very low, suggesting that many Canadian workers would be available to take up reasonably well paid and secure jobs if they  were being created.