Two views on jobs and the economy

One economic view is that Canada weathered the financial crisis better than any other G-7 country, and that we have more jobs today

By David Crane

Black Press columnist

One economic view is that Canada weathered the financial crisis better than any other G-7 country, and that we have more jobs today than before the financial crisis.

In other words, we’re doing reasonably well.

The other view is that while we have more jobs than before the crisis, the quality of jobs has declined, pay and benefits have fallen for many workers, close to one million workers are stuck in part-time jobs because they cannot find fulltime jobs and young Canadians are facing tough times in finding decent entry-level jobs that will set them on a trajectory for promising careers.

Both views are true. But the first one leads to complacency and inaction in pursuing decent jobs for all, while the one that should really concern us is what is happening to the quality of jobs and the impact this is having on the living standards of many ordinary Canadians.

Between April 2007, before the financial crisis hit, and April, 2013, Canada lost nearly 320,000 manufacturing jobs and the number of people working in part-time jobs rather than the full-time jobs they wanted totalled 924,400, or 256,200 more than in April, 2007. This does not fully account for all those Canadians working in temporary, contract jobs. What we do know is that too many Canadians are leading insecure lives, unable to build a real stake in society.

Much of the job growth since 2007 has come in the public sector ñ an increase of 128,00 jobs in education, 354,000 in health and social services and 139,000 in public administration ñ or in high-end occupations in professional, scientific and technical services (up by 254,000 jobs).

But for Canadians in middle-level jobs, or lower, the news has not been good. In its latest World of Work report, the International Labour Organization calculated that in Canada the share of the middle-income group (defined as those earning between 70 and 150 per cent of median income as a share of the total population) had declined from just over 50 per cent at the start of the 1990s to a bit over 45 per cent in 2009.

There has certainly been a downward pressure on wages for many workers, though not top executives in major corporations who may earn more in a day than some workers will earn in a year.

In contract agreements with the Detroit Three auto companies, for example, the Canadian Auto Workers had to agree to a 17 per cent pay cut for starting workers compared to their previous contract and to a slower path to the top rate, from 6 years before to 10 years in the new contract, as well as other cutbacks in pensions and other benefits.

In Ontario, workers at the very bottom of the pay scale, those earning just the minimum wage, have had their pay frozen since 2010, and Ontario’s recent budget extends that freeze further. This will make inequality worse and keep too many families close to the poverty line.

Public policy matters since income distribution and job creation resulting from the impacts of globalization and technological change can be affected by labour market legislation and fiscal, tax, trade and education policies, the ILO says.

Canada has done some of the things the ILO urges, such as increasing the incentive for businesses to invest by allowing a fast write-off of new investments. Canada has also expanded its support for innovative small and mid-size companies by doubling the budget for the Industrial Research Assistance Programme, which provides grants for companies pursuing new products or processes. While these efforts are delivering results, too many corporations are still sitting on record-level cash reserves.

But the haste to balance the federal budget works against employment prospects. For example, there are significant infrastructure needs across the country that should be met and which could generate good jobs. But the federal government has adopted a go-slow approach for the next several years because balancing the budget is a higher priority.

One of our goals as a society should be to pursue decent jobs and greater equity. Contrary to the views held by some, this does not come at the expense of productivity or economic growth. Rather, done the right way, it can contribute to both. A commitment to a fair and decent society should surely be a goal shared by all Canadians.

Today, though, that doesn’t seem to be a national priority.


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