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Highly educated workers more likely to have low-paying jobs: study

Highly educated workers more likely to have low-paying jobs

A new study says that getting another diploma may not be worth as much as it used to be in terms of getting a bump in your pay stub. 

The paper published by the Centre for the Study of Living Standards, an Ottawa-based non-profit economics research group, says that the ranks of low-wage earners with master’s degrees or PhDs has ballooned over the past seven years. 

According to the study, this highly educated group of Canadians saw their incidence of working low-wage jobs jump from 7.7 per cent nine years ago to 12.4 per cent in 2014.

That’s an increase of 2.1 per cent per year.

That increase also overlapped with a 0.9 per cent surge in the number of workers with a master’s or PhD over that time span.

The research defined a low-wage job as anything that had hourly earnings that fell below two thirds the median hourly pay for full-time workers between the ages of 20 to 64. In 2014, the study’s cutoff was $16.01 an hour.

In order to come up with the findings, the study looked at data from Statistics Canada’s Labour Force Survey.

Workers with master’s degrees and PhDs weren’t the only ones who became more likely to be stuck with a low-paying job over the time period.

The study found that every level of educational attainment studied saw an increase, including 50.7 per cent of workers with zero to eight years of schooling, which is four times that of a person with a master’s or doctorate degree.

At the same time, the study found that there were higher levels of educational attainment across the board, which according to the author, Jasmin Thomas, should result in a lower likelihood of low wages. 

But this was not the case. 

“Increased educational attainment should lower the incidence of low wages over time,” writes Thomas.

“This, however, is not showing up in the actual incidence of low wages, which is essentially stable between 1997 and 2014. This suggests that the demand for well-paying jobs has outpaced the supply.”

The study pointed to a New York Times article that suggested the American economy is not creating jobs that require university degrees, and indicate that the same trend may be occurring in Canada.

In particular, it said private sector white-collar jobs are increasingly migrating offshore or disappearing because of automation, while public-sector jobs have been squeezed by heavy layoffs and a lack of new hires. 

Concurrently, business investment and consumer spending have dipped, and without the government stepping in and opening up its coffers, there have been “chronic shortfalls in the demand for goods, services and employees.”

“These observations may also explain why there has been an increase in the incidence of low wages in Canada, even at higher levels of education attainment,” said the authors in the study.

The paper also offered broader findings about the quality of jobs available in Canada.

It found that in 2014, 27.6 per cent of all workers earned low wages.

However, this number represented a 0.3 per cent improvement from 1997.

The incidence of low-wage employment was higher among young workers (between the ages of 20 and 29), who were about 2.5 times more likely to hold one of those positions than their middle-age (ages 30 to 49) and older peers (ages 50 to 64). 

But overall, younger workers saw their employment in low-wage positions drop from 49.4 per cent to 47.5 per cent between 1997 and 2014. 

Women were also 1.5 times more likely be to be employed in a low-wage position than men.

However, work conditions appear to be on the improving for women: the incidence of low wages fell from 35.3 per cent in 1997 to 32.8 per cent in 2014.

There were also vast differences across provincial borders. 

Alberta had the lowest incidence of low-wage jobs at 14.4 per cent in 2014, with Saskatchewan (20.2 per cent), Quebec (22.1 per cent), Manitoba (24.5 per cent), British Columbia (26.9 per cent), Newfoundland (29.3 per cent) and Ontario (30.4 per cent) trailing behind.