This won’t be a surprise to many Canadians toiling away at work right now, but the quality of Canadian jobs is at its lowest level in more than two decades, a new report from CIBC shows.
The bank’s latest Canadian Employment Quality Index, has fallen across measures including part-time versus full-time work, paid versus self-employment and compensation trends.
What’s more, CIBC says the Bank of Canada’s move to lower interest rates, in an attempt to spur economic growth and in turn job creation, won’t cure the problem.
"The Bank of Canada continues to warn us that the headline unemployment rate is not as rosy as perceived and, in fact, according to the Bank’s new and improved measure of labour market activity, labour slack is still significant,” CIBC deputy chief economist Benjamin Tal said in releasing the report on Thursday.
"In many ways, the Bank has a point. Our measure of employment quality is now at a record low — suggesting that the composition of employment is sub-optimal.”
CIBC’s forecast for improvement is grim.
The distribution of part-time versus full-time jobs is considered the most important measure of employment quality, according to the index.
Tal notes the number of part-time jobs has risen faster than full-time ones, worsened by each economic downtown the country has been through over the past two decades.
"The damage caused to full-time employment during each recession was, in many ways, permanent,” he said.
The rise in self-employment is also seen as negative.
The report says the number of self-employed workers rose four times faster than the number of paid-employees for the year ended January 2015, and has been on a steady rise over the past 25 years.
CIBC says people who are self employed, on average, earn less than people who earn a regular salary from one company.
"Clearly self-employment can provide many other benefits — but from our narrow focus of a pure compensation-based quality measure, it is ranked below paid-employment," the report states.
It’s not all bad news though. The report notes the number of full-time jobs has been rising over the past year, twice as fast as the number of part-time jobs.
Still, Tal says not all full-time jobs are considered quality gigs.
The number of low-paying, full-time jobs rose twice as fast as the number of high-paying jobs over the past year.
"The slow growth in the number of high-paying jobs might reflect a growing labour market mismatch," the report states.
It also shows that job quality in Alberta is already being affected by low oil prices, dropping 3 per cent on the index in 2014, with similar declines in Saskatchewan and Manitoba. Ontario fell by four per cent, while British Columbia, Atlantic Canada and Quebec saw increases over the same period.
Over the past decade, wages in high-paying sectors rose almost twice as fast as wages in low-paying sectors, the report says, which may be bad news for the earning power of Millennials entering the labour force.
"In other words, the fastest growing segment of the labour market is also the one with the weakest bargaining power,” Tal says. “That works to weaken the link between labour market performance and aggregate wage gains.”
Tal says today’s low interest-rate environment, “will do little to close that gap.”