Canada Among World Leaders For Creating Crappy Jobs: Morgan Stanley (CHART)

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Canada has the third-highest proportion of low-paying jobs among the world’s wealthy countries, investment bank Morgan Stanley says.

In an analysis of data from the OECD, Morgan Stanley economists Ellen Zentner and Paula Campbell found that only the U.S. and Ireland have a higher percentage of low-paying jobs than Canada.

On average, about 16 per cent of jobs in the 35 advanced economies of the OECD are counted as low-paying, but in Canada that number is around 22 per cent, and in the U.S. it’s above 25 per cent.

low wage jobs

The analysts define a low-paying job as one that pays less than two-thirds the median wage. According to StatsCan, Canada’s median wage for individuals was $27,600 as of the latest national household survey.

Many observers of Canada’s job market have been growing worried about the quality (and quantity) of jobs being created in recent years.

A 2013 report from CIBC found that employment quality in Canada has been in a long-term decline. The bank’s job quality index was 14 per cent lower last year than it was in the late 1980s, and CIBC says the largest part of that is due to the fact that low-end jobs have been growing much faster than high-end jobs.

cibc job quality chart

The report also noted that the number of part-time jobs has grown by 56 per cent since the late 1980s, compared to growth of 37 per cent for full-time jobs. Growth in the number of people declaring themselves “self-employed” also outstripped growth in full-time jobs.

But not everyone agrees Canada is becoming “a nation of part-timers.” TD Bank economists Randall Bartlett and Derek Burleton wrote earlier this year that the weakness in job quality is a temporary pull-back following strong job growth in the years following the financial crisis.

But the report noted that, with an ever-larger proportion of women in the workforce and many aging baby boomers partially retiring or reducing their work hours, part-time employment may still outgrow full-time employment for some years.

The quantity of jobs has also been problematic. With job growth over the past year being concentrated pretty much entirely in one province (Alberta), the rest of the country has seen a stagnating job market.

Bank of Canada deputy governor Carolyn Wilkins told an audience this week that the country is not creating the number of jobs it needs to generate before the economy can be said to be healthy.

Wilkins noted that the average monthly employment gain of about 6,800 jobs over the past year is “just a little bit over half of what we need.”

With files from Kevin Short, Huffington Post U.S.

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