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Canada lacks ‘quality’ employment: CIBC

This will come as little surprise to the average worker, but when it comes to employment across Canada it seems quantity is ruling over quality.

An analysis of the Canadian job market by CIBC World Markets shows “employment quality” – which is basically high-paying, full-time jobs - is down significantly from what can now be considered the heyday of the late 1980s.

CIBC says the biggest contributor is the growth of jobs in the low-to-mid wage industries as compared with higher-paying ones.

That is a problem not just for the average worker trying to make ends meet, but consumer spending that helps drive the economy as the pace of income growth slows.

“Simply put, all other things being equal, lower employment quality means that the labour market has to run faster to stay in the same place since we need relatively more workers to generate the same increase in income,” CIBC deputy chief economist Benjamin Tal says in a new report.

While Tal acknowledges job satisfaction and fulfillment are also factors in job quality, this measure is focused purely on economic components such as compensation, part-time versus full-time work and paid versus self-employment.

For instance, the report says, on average, a self-employed person earns about 20 per cent less than a regular employee. “However, when it comes to subjective measures such as job satisfaction, self-employed jobs appears to be of higher quality,” the report states.

CIBC’s Employment Quality Index is on a downward spiral, showing a drop of more than 14 per cent in from the late 1980s. It appears job quality never fully recovered from the recession in the 1990s, and was kept down by the latest economic downturn in 2008-09 in Canada.

The report shows the number of part-time employees rose 56 per cent since the late 1980s, compared to the 37 per cent rise in full-time workers over the same period.

Not all Canadian workers are complaining though. Thanks to demand for workers in the oil and gas and mining sector, high-quality jobs in Alberta and Saskatchewan have been on the upswing, while Ontario and Atlantic Canada have seen the largest drops amid jobs losses in the manufacturing and fishing industries.

CIBC says this lower quality of employment trend highlights the growing shortage of skilled labour in Canada. “While in the past, the tepid growth in the number of high-paying jobs was more due to demand factors, today the issue is more lack of supply.”

The report comes after Statistics Canada reported Friday that hourly compensation rose 0.1 per cent in the first quarter.

These employment trends also expose the problem of hiring temporary foreign workers, which has been an explosive issue in Canada in recent weeks. Ottawa recently announced changes to the temporary foreign worker program, including killing a rule that allowed businesses to pay foreign workers up to 15 per cent below average wages for a job.