Are Good Jobs Disappearing in Canada?
by René Morissette and Anick Johnson
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 239
Context
Some observers are suggesting that employers now use outsourcing abroad
not only for manufacturing, but also for jobs in the service sector
that have high skill requirements. These changes in the behaviour of
firms have potentially important implications for the type of jobs available
to Canadian workers. One may argue that unless jobs affected by the
new (and old) forms of outsourcing are replaced elsewhere in the Canadian
economy by others providing similar wages, the fraction of well-paid
jobs in Canada should decline over time.
Objectives
The goal of this study is to answer the following questions :
- Has the proportion of well-paid jobs fallen since the early 1980s?
- Has the proportion of low-paid jobs risen since the early 1980s?
Findings
We find little evidence that the relative importance of well-paid jobs—however
defined—has fallen over the last two decades or since the second
half of the 1990s. Second, we also find little evidence that the relative
importance of low-paid jobs, those paying less than $10.00 per hour,
has risen during these two periods.
Third, we show, along with numerous previous studies, that the wage
gap between workers under 35 and their older counterparts has risen
substantially over the last two decades but that the wage gap between
university graduates and other workers has shown little change. Fourth,
and more important, we show that, within age groups, wages of newly
hired male and female employees—those with two years of seniority
or less—have fallen substantially relative to those of others.
Fifth, in the private sector, the fraction of new employees employed
in temporary jobs has risen substantially, increasing from 11% in 1989
to 21% in 2004. Among employees with one year of seniority or less,
the incidence of temporary work rose from 14% in 1989 to 25% in 2004.
Sixth, pension coverage has fallen among males of all ages and among
females under 45.
Taken together, these last three findings suggest that Canadian firms
(existing or newly-born) have responded to growing competition within
industries and from abroad in at least three ways, i.e., by reducing
their wage offers for new employees, by offering temporary jobs to a
growing fraction of them and by reducing their propensity to offer defined-benefit
pension plans.
Data sources
Survey of Work History of 1981; Survey of Union Membership of 1984;
Labour Market Activity Surveys of 1986-1990; Labour Force Surveys of
1997-2004; General Social Surveys of 1989 and 1994; Survey of Consumer
Finances of 1981-1997; Longitudinal Administrative Databank.
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