Study: Emerging patterns in the labour market: A reversal from the 1990s

Many labour market trends established in the 1990s have been reversed since 2000. Most of these recent trends intensified in the past year, according to a report released today in the Canadian Economic Observer. In particular, it was another banner year for the resource sector. These gains were reflected in stronger employment growth in rural areas and in large firms. In terms of supply, older workers continued to fill the bulk of new jobs. A new trend was full-time positions, which accounted for most job growth.

Mining outside of oil and gas led all industries with a 16% surge in jobs last year. This snapped a downward trend that stretched back to 1990 and saw the loss of nearly half of all jobs in this industry. Metal mining was lifted by buoyant prices, many of which hit their highest level in over a decade.

Oil and gas continued to experience double-digit growth. All areas expanded: extraction grew as new developments in the oil sands and offshore Newfoundland came on line, while the search for new sources intensified to replace dwindling conventional supplies.

Construction jobs rose, on top of growth in each of the previous three years. Public sector employment increased, continuing its recovery from cutbacks in the 1990s. Education led the way, as universities stepped up hiring.

Mining and oil and gas are dominated by large multinationals. With double-digit growth in these industries, and the public sector expanding steadily, large establishments (more than 500 employees) again drove employment gains, up 6%. Medium-sized employers (20 to 500 employees) were next with a 1.1% gain.

Small firms with less than 20 employees continued to lag, as they have for most of this decade. This is a reversal from the previous decade, when small firms dominated job growth, especially in the information and communication technology sector.

Jobs in small towns and rural areas rose 1.3% last year, comparable with the 1.4% gain in urban Canada. Rural employment has matched urban areas since 2001, after lagging at half their growth in the previous decade.

A look at which regions posted the largest job gains in 2005 confirms the recovery of rural areas. Northern Manitoba led the way with an increase of 10%. The region of Athabasca in Alberta was close behind, fuelled by the explosive development of its oil sands. The revival of mining helped the north and interior of British Columbia. Cape Breton led the Atlantic region in job growth, up 6.5%, the sixth best among the 68 regions. Rural Saskatchewan was helped by the rebound in farming.

The growth of rural regions was quite uneven, however, due to the cuts in the forestry sector. The closing of several lumber and paper mills was reflected in job losses in several rural areas of New Brunswick, Quebec and Northern Ontario.

Employment in cities last year was hampered by losses in those whose industrial base contracted. Toronto and Vancouver bucked the trend of weaker job growth in cities, with increases of over 2%.

The strength of the labour market was reflected in a sharp move from part-time to full-time employment, especially in Alberta and British Columbia where labour shortages emerged.

The shift to full time began after 2003: since then, full-time positions have risen 4%, while part-time jobs fell outright. All the drop in part-time jobs has been due to a one-third decline in people who could not find full-time work (from 145,000 in 2003 to 96,000 last year).

The growing presence of older workers continued in 2005. The number of workers aged 55 years and over rose by 6.2% last year, compared with a 0.7% increase for workers under 55 years.

While the share of older workers in the labour force would inevitably have risen as the first of the boomer generation turns 60 this year, the growth of older workers was given a further boost by the end of downsizing in resources, construction and the public sector. Now, these same industries are leading growth, especially for older workers.

The growing number of older people, combined with their increasing likelihood of staying in the labour force, has steadily driven up their contribution to overall job growth. Since 1996, the share of all job increases going to workers 55 years and over has risen steadily from 19% to 58% last year (it averaged less than 10% in the 1980s).

The distinguishing characteristic of the boomer generation in the labour market has always been their higher level of education compared with previous generations. This greater education is reflected in the proportion of people aged 55 to 64 with some post-secondary education, which rose from about one-quarter in 1990 to one-half last year as boomers moved into this cohort en masse.

Older workers increasingly have the education and skills coveted by employers. Since 1995, 94% of the increase in the number of people 55 and older had some post-secondary education. As a result, employers seeking workers with post-secondary qualifications had little choice but to look at older workers: nearly 40% of the better-educated were over 45 years old last year, nearly double their share in 1990.

The significance of the growing number of older people with higher education is that they are more likely to stay in the labour force and find a job. The participation rate of people aged 55 or more with some post-secondary education is nearly twice as large as for those with high school or less. They are also twice as likely to be employed, with an employment rate of 40% versus 21% for those with only high school or less.

Definitions, data sources and methods: survey number 3701.

The study "Emerging patterns in the labour market: A reversal from the 1990s" is now available for free online. The study is also included in the February 2006 Internet edition of Canadian Economic Observer, Volume 19, no. 2 (11-010-XIB, $19/$182), which is now available. The monthly paper version of Canadian Economic Observer, Volume 19, no. 2 (11-010-XPB, $25/$243) is available Thursday, February 23.

Visit the Canadian Economic Observer page online. From the Canadian Statistics page, choose National Accounts, then click on the banner ad for Canadian Economic Observer.

For more information, contact Philip Cross (613-951-9162; ceo@statcan.gc.ca), Current Economic Analysis Group.