canadian employment quality index

Canadian
Employment Quality Index
November 4, 2010
Economics
Avery Shenfeld
(416) 594-7356
[email protected]
Benjamin Tal
(416) 956-3698
[email protected]
Peter Buchanan
(416) 594-7354
[email protected]
Warren Lovely
(416) 594-8041
[email protected]
Krishen Rangasamy
(416) 956-3219
[email protected]
Emanuella Enenajor
(416) 956-6527
[email protected]
Improvement in Employment Quality
Unsustainable
by Benjamin Tal
The quality of employment in Canada has
improved measurably during the first nine
months of the year. The creation of almost
330,000 jobs has coincided with close to
4.0% improvement in our employment
quality index (Chart 1).
Our measure of employment quality
combines information on the distribution of
part-time vs. full-time jobs; self-employment
vs. paid employment; and the compensation
ranking of full-time paid employment jobs
in more than 100 industry groups. As of
September this measure was able to regain
all the ground it lost during the recession.
This is a much better performance than a
similar measure in the US, with the American
quality of employment index continuing to
soften alongside subdued job growth (Chart
2).
The improvement in our measure of
employment quality might surprise many
observers given the fact that part-time
employment has risen almost three times
faster than full-time employment since the
beginning of the year (Chart 3). However,
as indicated earlier, the full-time/parttime distribution is only a small part of a
comprehensive measure of employment
quality.
While the notable increase in part-time
employment acted as a negative for our
measure, the strong increase in paidemployment relative to self-employment
(Chart 4) acted to offset this negative.
More important, however, is the fact that
the distribution of full-time paid jobs has
improved notably over the past nine months
with the number of high-paying jobs rising
Chart 2
Chart 1
Quantity & Quality Rising In Tandem
106
Employment Quality Index—
Canada vs. US
110
Index Jan 2007=100
105
Index Dec 2006=100
105
104
103
100
102
95
101
90
100
Employment
C IBC Employment Quality Index
Source: Statistics Canada, CIBC
Canada
Jun-10
Sep-10
Mar-10
Dec-09
Jun-09
Sep-09
Mar-09
Dec-08
Jun-08
Sep-08
Mar-08
10
Dec-07
09
Jun-07
08
Sep-07
07
Mar-07
98
Dec-06
85
99
US
Source: Statistics Canada, Bureau of Labor Statistics, CIBC
http://research.cibcwm.com/res/Eco/EcoResearch.html
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C I B C W o r l d M a r k e t s C o r p • 3 0 0 M a d i s o n A v e n u e , N e w Yo r k , N Y 1 0 0 1 7 • ( 2 1 2 ) 8 5 6 - 4 0 0 0 , ( 8 0 0 ) 9 9 9 - 6 7 2 6
CIBC World Markets Inc.
Canadian Employment Quality Index - November 4, 2010
four times faster than low-paying jobs. More than ninety
percent of the full-time jobs created since early 2010
have been high-paying positions (Chart 5). By province,
the most significant improvement was in the West with
British Columbia and Alberta leading the way. The quality
of employment also improved in Central Canada (Chart
6).
in part by stimulus money, single-handedly added a
quarter of all jobs since the recovery started, with growth
of 10% versus negative growth at this stage in previous
recoveries. Altogether these two sectors have had a hand
in spurring more than one-third of all jobs created in this
recovery. And those jobs are relatively high quality (higher
paid). With fiscal tightening, and the housing market
losing ground, the economy will be unable to replace that
sizable contribution from public sector and construction
jobs. And it is unlikely that the new jobs created in 2011
would be of the same high quality—limiting the upside
potential in personal income and helping to keep the
Bank of Canada on the sidelines.
How sustainable is this trend? Note that the public sector
accounted for no less than 10% of all jobs created in
the economy during the recovery versus less than 1% in
other recoveries. And the construction industry, spurred
Chart 3
Chart 4
Part-Time vs. Full-Time Jobs
Self-Employed vs. Paid Employees
September 2010
y/y % chg
5.0
Index Jan 2003=100
116
Index Jan 2003=100
September 2010
3.0
3-mo moving avg
y/y % chg
116
4.5
114
2.5
4.0
112
2.0
3.5
110
1.5
3.0
108
1.0
2.5
106
0.5
106
2.0
104
0.0
104
1.5
102
-0.5
102
1.0
100
-1.0
0.5
98
-1.5
03 04 05 06 07 08 09 10
0.0
Part-Time
Full-Time
Part-Time
114
112
110
108
100
98
SelfPaid
Employed Employees
Full-Time
Source: Statistics Canada, CIBC
Source: Statistics Canada, CIBC
Chart 5
Chart 6
Full-Time Paid Employment
September 2010
6.0
y/y % chg
3-mo moving avg
6
5
108
3
104
3.0
2
102
2.0
1
100
0
98
1.0
-1
96
0.0
-2
03 04 05 06 07 08 09 10
Low-Paying High-Paying
Sectors
Sectors
% chg
4
106
4.0
Self-Employed
Paid Employees
(Q3-2009 vs. Q3-2010)
110
5.0
03 04 05 06 07 08 09 10
% Change in EQI by Province
Index Jan 2003=100
112
3-mo moving avg
118
MAN/SASK ATL
Low-Paying Sectors
ONT
High-Paying Sectors
Source: Statistics Canada, CIBC
Source: Statistics Canada, CIBC
QUE
ALTA
BC
CIBC World Markets Inc.
Canadian Employment Quality Index - November 4, 2010
CIBC Employment Quality Index by Province
Alberta
British Columbia
115
110
Index 1994=100
quarterly observations
112
Index 1994=100
quarterly observations
108
105
104
100
100
95
90
96
85
92
9495969798990001020304050607080910
9495969798990001020304050607080910
Source: Statistics Canada, CIBC
Source: Statistics Canada, CIBC
Manitoba/Saskatchewan
Ontario
Index 1994=100
quarterly observations
110
108
112
110
108
106
104
102
100
98
96
94
92
106
104
102
100
98
96
94
92
Index 1994=100
quarterly observations
9495969798990001020304050607080910
9495969798990001020304050607080910
Source: Statistics Canada, CIBC
Source: Statistics Canada, CIBC
Quebec
Atlantic
110
108
Index 1994=100
quarterly observations
104
102
100
98
96
94
92
90
88
86
84
82
106
104
102
100
98
96
94
92
9495969798990001020304050607080910
Index 1994=100
quarterly observations
9495969798990001020304050607080910
Source: Statistics Canada, CIBC
Source: Statistics Canada, CIBC
CIBC World Markets Inc.
Canadian Employment Quality Index - November 4, 2010
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