The CEO of TD Canada Trust is warning that the country faces a “pervasive and profound” problem with income volatility.
Some 37 per cent of adult Canadians — or about 10 million people — experienced moderate to high levels of income volatility over the past year, according to a new Ipsos poll carried out for TD.
Of those, some 3.3 million people saw their pay go up or down by as much as 25 per cent from month to month.
“Our findings suggest that impact is both pervasive and profound – making it hard for many people to live the life they want today, let alone plan for and feel confident about their future. It’s a subject worthy of closer examination,” Bharat Masrani said in a statement.
TD Bank CEO Bharat Masrani.
Young adults, particularly women, as well as men aged 45 to 54, saw some of the highest rates of income volatility, the study found. Those who are working part-time, are self-employed or are seasonal workers are the likeliest to experience volatility.
“This confirms what many community organizations have suspected for some time – that there has been a sea change in the financial lives of Canadian households, Elizabeth Mulholland, CEO of charity Prosper Canada, said in a statement.
“Rising income volatility appears to be making it far more challenging for households at all income levels to manage financially, but Canadians with lower incomes are really feeling this most sharply.”
Those with volatile incomes are twice as likely to feel stressed “often” about their finances. They are more likely to delay buying groceries and pay only the minimum on their credit card, and less likely to pay off monthly bills, the study found.
Job quality is on the decline in Canada, as evidenced by a new study showing 10 million Canadian adults experienced income volatility in the past year.
This is the first study of its kind carried out by TD, so it’s not possible to compare with earlier results. But other measures of Canadian job quality are showing a decline.
A CIBC study last November found “a slow but steady deterioration” in job quality in Canada over the past two decades.
CIBC economist Benjamin Tal found that an ever-larger share of Canadians are finding work in low-paid areas, while a smaller share is seeing work in above-average jobs.
“That trend is consistent with a widening wage gap symptomatic of deteriorating labour market quality,” Tal wrote.
The issue took on new political dimensions after Finance Minister Bill Morneau argued Canadians will have to get used to job “churn” in the new economy — a sentiment that caused a backlash among many youth activists.