January 2001     Vol. 2, no. 1

The labour market: Year-end review

Geoff Bowlby

The year 2000 was another good one for the Canadian economy and labour market. Employment continued a four-year climb, while the unemployment rate remained at a low not seen since the 1970s.

While it was a good year for job seekers and workers, it was not a great year. Entering 2000, a fast-growing economy had delivered 37 consecutive months of employment gains.   1  The year started with a bang and employment growth continued to move forward in the first quarter.

However, even though gross domestic product (GDP) growth continued to be strong, signs that the economy was slowing began to appear in the second quarter (Statistics Canada, 2000), which eventually affected the labour market. Employment plateaued over the summer, the first time this had happened since 1996 (Chart A).

With some indications of a slowdown in the U.S. market, exports to that country slipped slightly in the third quarter, ending 14 consecutive quarterly gains. Still, domestic demand remained strong, and in the second half of the year the labour market rebounded from its summertime plateau with strong job gains.

By the end of the year, employment was up more than 319,000, a healthy increase of 2%, though less than the over 400,000 (3%) average of the previous three years. Even though employment growth slowed in 2000, participation in the labour market continued to climb. As a result, the unemployment rate stayed in the 6.8% range throughout the year, the lowest since the 1970s (Chart B).

Strength in the labour market shifted to services

In the first nine months of 2000, goods-producing GDP increased by 2.2%, about half the comparable rate in 1999. At the same time, the service sector continued to grow at a pace similar to that of 1999 (Chart C).

Slower economic growth in the goods sector was reflected in the labour market. Indeed, for every additional goods-producing job, 10 service jobs appeared. This came about as manufacturing growth slowed to a more moderate pace than 1999's (Statistics Canada, 2000) and farm employment dropped sharply (Table 1).

Increased demand for workers in the service sector had the expected effect on the mix of occupations. For example, sales and computer-related jobs were more plentiful in 2000 than in the year before. More jobs in this sector also led to an increase in part-time work, a change from the previous year, when part-time employment actually fell. As well, youths and core-age (25 to 54) women, who are more likely than men to work in the service sector, gained over three-quarters of the jobs.

Employment grew equally in professional, scientific and technical services, and information, culture and recreation. Smaller increases appeared in health care and social assistance, and management, administrative and other support services. The largest increase, however, occurred in the industry that employs the most: retail and wholesale trade.

Added work in "high-tech" services

Growth in professional, scientific and technical services was driven by computer design services—an industry providing a wide range of computer-related services, including programming, Internet page design and computer systems analysis, design and integration. At the end of 2000, one-quarter million people worked in the computer systems design industry (up 20,000 or 9% from 1999). Only 6% did so on a part-time basis. Employment in this industry has tripled since early 1994, when the strong upward trend began.

Undoubtedly, such growth led to strong demand for programmers, systems analysts and computer engineers. Collectively, employment in these three occupations jumped 20,000 (6%) to 355,000 (Chart D).

Information, culture and recreation also up

Strong demand for highly trained computer professionals is one indicator of the so-called "knowledge" economy. So too is the growth in information, culture and recreation (64,000 or 10%), an industry related to the use of the Internet and other information media.

Growth in this industry was spurred by added jobs in a few key areas. Broadcasting and telecommunications employment increased 22,000 (11%), while jobs in publishing rose by 19,000 (24%) in 2000. Finally, employment in information services and data processing services was up 10,000 (24%). This industry includes news syndicates, libraries and companies that provide Internet access services.

Over the last half of the 1990s, employment in amusement, gambling and recreation establishments grew strongly, a trend that continued in 2000 with an increase of 21,000 jobs (15%). While added casino employment made up about 40% of this increase, recreational facilities such as golf courses, ski hills and fitness centres accounted for another half. At close to 160,000, the number of amusement, gambling and recreation workers was more than double that at the start of the 1990s (Chart E).   2 

Rising employment services and business support services

Behind discussion of the "new economy" is the notion that competitive and technological pressures have radically altered the economy and the labour market (Picot and Heisz, 2000). One of the expected outcomes of increased competition is a greater reliance on contracting-out. There is some evidence that firms are increasingly buying services once provided in-house. Over the last decade, employment in companies providing employment services (employment placement agencies, temporary help services and employee leasing services) has increased markedly. Growth in this industry, part of management, administrative and other support services, indicates that companies may increasingly be relying on other firms to help them with their human resource services needs. In 2000, an additional 17,000 people (25%) worked in employment services. By the end of the year, some 85,000 workers were in this industry, more than double the level of 1994.

Growth in another part of management, administrative and other support services—business support services—has also been linked to contracting-out. People employed in this industry are engaged primarily in activities such as desktop publishing, word processing, telephone answering and voice mail services, telemarketing services and photocopying services. In 2000, employment in business support services rose 36,000. Like employment services, employment in this industry has doubled in the last six years, hitting 88,000 by the end of 2000.

More work in retail and wholesale trade

The industry employing the most people in Canada is retail and wholesale trade. Following a slow start in 2000, retail sales accelerated in the middle of the year and by October, were 3.4% higher than at the start of the year. While the relationship between trade sales and employment is not always direct, improved sales at retail outlets may have led to greater demand for workers in this industry. In 2000, trade employment rose 3.6% (83,000), reaching a level of over 2.3 million (Chart F).

Manufacturing slowed, agriculture dropped

Following strong growth of almost 6% in 1999, manufacturing employment slowed to a more moderate pace in 2000. Declining over the summer, it picked up strongly in the last 3 months, ending the year up 60,000 (3%). This represents a slowdown from the previous year but is still above the all-industry average. While still growing strongly, manufacturing shipments also slowed in the first 10 months of 2000. From January to October, they increased 5%, compared with 6% over the same period in 1999.

As manufacturing employment growth levelled off, the drop in farm employment accelerated (Chart G). Following a decline of 25,000 (6%) in 1999, the number of workers who counted agriculture as their main job fell another 52,000 (13%) in 2000, probably owing to a combination of factors. Continued labour market strength may have drawn some people, including farm spouses and children, off the farms and into better-paying jobs. Others may have been "pushed" as they faced financial problems caused by relatively low commodity prices, rising fuel and other farm input costs. Third, the typical agricultural worker is older than average, which suggests that the drop in farm employment may also reflect retirement.

In contrast to 1999, part-time work increased

In a year of services employment growth, some increase in part-time work is to be expected. Indeed, of the 319,000 increase in employment in 2000, some 263,000 jobs were full-time while the remaining 56,000 were part-time. This equates to growth rates of 2.2% and 2.1%, respectively. In 1999, part-time employment had actually fallen (Chart H).

After climbing in the first four years of the 1990s, the proportion of the employed working part time plateaued at around 19% for the next five. In the last two years, it was in the 18% range.

Sales and service occupations picked up

While employment by industry and job status tells a lot about the nature of employment growth, changes by occupation reveal more about the skills employers are demanding.   3 

With employment up in the service sector, it is no surprise that it also rose in sales and service occupations. Over the year, some 124,000 (3%) sales and service workers were added, driven by hiring at retail and wholesale outlets. But, while the number of these workers in trade rose in 2000, there were fewer retail and wholesale store managers.

Among the major occupational groups, the next largest increase was in business, finance and administrative jobs. This set of occupations consists largely of clerical and secretarial workers. Most of the 122,000 (5%) increase occurred in two industries: professional, scientific and technical services (which includes the computer services industry mentioned earlier) and management, administrative and other support services.

The number of managers increased in several industries, most notably, in finance, insurance and real estate and in manufacturing. By the end of the year, they had grown by 61,000 (4%) (Chart I).

Also rising strongly was employment in natural and applied sciences, up 48,000 (5%). This occupation includes computer programmers, systems analysts and engineers. Not surprisingly, the number of natural and applied science workers in professional, scientific and technical services increased (most likely in the computer design services component). Manufacturing also increasingly employed natural science workers.

In 2000, the general skill level of manufacturing workers appears to have shifted upward, as fewer were employed in blue-collar processing occupations and more worked as managers, natural and applied science, and trades workers. Some of the explanation may lie in the changing nature of what is being manufactured in Canada. According to the Survey of Employment, Payrolls and Hours (which can provide more accurate detailed industry breakouts than the Labour Force Survey), the shift has been away from clothing and pulp and paper production and toward more technical communications equipment, aircraft and motor vehicle parts (Chart J).

At the other end of the scale were employment losses in occupations unique to primary industry. Employment in this group fell by 47,000 (8%), not entirely unexpected given the decline in agricultural employment.

More workers at all skill levels

The issue of skills has probably always been an important aspect of the labour market. However, in recent years it has come to the forefront as the increased pace of technological change, heightened competitiveness and globalization, along with other factors, have changed the type and quality of skills demanded (and supplied) in the workforce.

In order to assess and track changes in the skill level of the workforce, a simple, coherent system is required. Using a method developed at Human Resources Development Canada, it is possible to assign a skill level to each occupation.   4  This system divides workers into four groups, ranked from highest to lowest (A to D) in a skill hierarchy, and places managers in a separate group.

In 2000, employment increased more at each end of the spectrum. Occupations requiring technical or paraprofessional skills (level B) increased the most, jumping 145,000 (3%). Among the most highly skilled (level A), employment increased 49,000 (2%). At the other end, workers in labouring or elemental jobs (level D) increased by 56,000 (3%). The number working in jobs requiring intermediate skill levels (level C) increased only slightly (Chart K).

First drop in self-employment since 1986

Class of worker (self-employed, public or private sector employee) is another category useful in assessing the nature of work. The year 2000 was the first since 1986 that self-employment declined. The drop was significant, as 146,000 fewer people worked for themselves by the end of the year, a decline of 6% (Chart L). About one-third of this can be attributed to reduced farm employment. The number of self-employed farmers declined by 50,000.

Self-employment also fell strongly in "other services," an industry made up of workers from a wide range of activities, including babysitting, which was second to farming among declines. Why did self-employment in other services drop? With employment rising in better-paying entry level jobs in such areas as retail trade, fewer teenagers may have been available to babysit. Or they may have been doing this only as a second job.   5 

Strong private sector hiring

In contrast to self-employment, the increase in the number of private sector employees was unusually strong in 2000, jumping 376,000 (4%). After the recession of the early 1990s, hiring in the private sector did not resume in earnest until the latter part of the decade. With the increase in 2000, the proportion of all employed people engaged in paid employment in the private sector finally surpassed its 1989 peak. In November 2000, 65.6% of all employed people worked as private sector employees, the highest rate since at least 1976 (Chart M).

Workers in health care boosted public sector

For the second consecutive year, more people worked in the public sector, which rose by 89,000. With declines in both public administration and education employment in 2000, health care and social assistance provided most of the increase.

The largest component of health care and social assistance is employment in hospitals, although the industry also includes doctors' offices, nursing homes and social service agencies. While some growth occurred in social service employment, the bulk of the increase occurred in hospitals, especially among professional and nursing staff (Chart N).

Who found work?

The type of employment growth often determines who is hired. In 2000, growth in the service sector would certainly appear to have led to more work for youths and core-age women (Chart O), who are more likely than men to work in service jobs. Over the year, employment among women of core working age increased by 115,000 (2%). This exceeded their population growth, pushing their employment rate up 0.9 percentage points over the year to 74.4%.

Added hospital and retail trade employment drove the increase in core-age female employment. More women were also employed as sales managers and supervisors, and teachers.

Youths saw the next largest employment gain, with an increase of 90,000 (4%). The bulk of this increase was in retail trade. Their employment rate grew 1.8 percentage points, to 57.4%. Over the last three years, the percentage of youths with a job has increased over 6 points, more than that of any other group. Even with these strong gains, the youth employment rate remains almost 7 percentage points lower than its peak in the late 1980s.

As mentioned earlier, the unemployment rate was close to 6.8% throughout 2000, influenced by rising labour market participation. Much of this additional activity came from youths as school attendance fell. For the first time since 1979, the percentage of young people attending school full time dropped for three consecutive years. In 2000, 56% of youths attended school full time, down a full percentage point from the year before (Chart P).

Following a gain of 134,000 (2%) in 1999, employment growth among core-age men slowed to 58,000 (1%). Smaller employment gains in manufacturing, along with the decline in agriculture, contributed to the slowdown. The increase was not enough to keep pace with their population growth, leading to a slight drop in their employment rate (at 85.7%, still higher than any other group's).

The 56,000 increase in employment among older people was similar to that for core-age men, although the latter group is much larger. An increase of 4% was concentrated among older women in retail outlets and hospitals. Almost one-quarter of all people 55 or older were working in 2000, a rate last seen at the start of the 1990s.

Where were the jobs?

Employment rose in almost every province, especially Ontario, the largest. Moreover, although 40% of all employment was in that province, 60% of the increase occurred there. Also gaining disproportionately were Alberta, British Columbia and the three Maritime provinces (Table 2).

Ontario continued to steam ahead

While manufacturing employment slowed in the rest of the country, it continued to improve at a strong pace in Ontario, jumping 78,000 (7%). With the increase in manufacturing and gains in parts of the service sector, employment rose by 186,000 over the year, an increase of 3.2%. Over the last four years, employment growth in the province averaged 3.4% per year.

The strong job increase was enough to raise Ontario's employment rate 0.8 percentage points, but a surge in labour force participation actually led to an increase in the unemployment rate. By the end of the year, the unemployment rate in Ontario was 6.0%, half a percentage point higher than at the start of the year.

The two largest cities in Ontario—Toronto and Ottawa—saw the greatest gains. Compared with the year before, an additional 119,000 people worked in Toronto, an increase of 5%. In Ottawa, 22,000 more people were employed—a growth rate of 4%. The gain in manufacturing contributed strongly to the growth in these two cities, as it did in communities like Windsor, St. Catharines-Niagara, Kitchener-Waterloo and London.

Slower growth in Quebec but low unemployment

Following three years of gains averaging 3%, employment growth in Quebec slowed in 2000. Compared with the start of the year, 26,000 (1%) more people were employed in December, just enough to keep pace with population growth. Unemployment remained at historically low levels. By the end of the year, the unemployment rate had slipped to 8.0%, for the first time since early 1976 (Chart Q).

Gains in Vancouver pushed B.C. employment upwards

The next most populous province, British Columbia, saw a 2% increase in employment. By the end of the year, some 44,000 more people were working, pushing the employment rate up 0.6 percentage points to 60.6% and pulling the unemployment rate down to 7.1% from 7.8% at the end of 1999.

The strength of the British Columbia labour market was a reflection of improvements in Vancouver. Increased food and accommodation, and information, culture and recreation work helped lower the unemployment rate to 5.8% by December, less than Toronto's (6.1%) or Montréal's (7.8%). Throughout the year, the employment rate rose in Vancouver, hitting 62.8% in December, 1.7 percentage points higher than at the start of the year (Chart R).

Continued growth in Alberta

Of all the provinces, Alberta has had the steadiest and most prolonged increase in employment. The year 2000 marked the eighth consecutive year of growth in excess of 2%. By the end of the year, employment was up 41,000 (3%), owing to increases in accommodation and food, construction and manufacturing. This job growth pushed the unemployment rate to 4.8% by December, 0.6 percentage points lower than a year earlier.

While employment has increased in both Calgary and Edmonton in recent years, it has grown at a faster rate in Calgary. In the mid-1990s, more people worked in Edmonton; by 2000, some 58,000 (11%) more were working in Calgary. In the last six years, its largest gains have been in professional, scientific and technical services and manufacturing.

Stronger employment rate increase in Manitoba

With gains in manufacturing and information, culture and recreation, employment grew 10,000 (2%) in Manitoba in 2000. With working-age population growth of only 0.7% (almost half the national rate), the employment rate ended the year at 64.6%, an increase of 0.7 percentage points. At 4.9% in December, the low unemployment rate in Manitoba was second only to that of Alberta.

Agriculture led the employment loss in Saskatchewan

For the second consecutive year, farm employment fell in Saskatchewan (Chart S). In 2000, however, the decline of 13,000 (almost 19%) was much larger. One in 10 employed people in Saskatchewan worked on a farm, more than any other province. Therefore, with the decline in agriculture, it is no surprise that overall employment in the province dipped by 5,000 (1%).

Growth continued in the Maritimes

In Nova Scotia, New Brunswick and Prince Edward Island, job growth was above 2.5%. By the end of the year, the proportion of the population with a job was 59.3% in Prince Edward Island, 56.7% in Nova Scotia and 55.9% in New Brunswick. While still low relative to the rest of the country, employment rates in each of these provinces hit all-time highs in 2000 (Chart T).

Newfoundland was the only province in the East where employment fell. Compared with the end of 1999, some 7,000 fewer people were working in Newfoundland, a decline of 3%. The loss in 2000, however, came on the heels of strong growth in the previous three years. Since 1996, when employment began to increase at the national level, employment in Newfoundland has increased by 10.9%, not far behind the 11.5% growth nationally.

Notes

1. Employment actually fell in January 1998 but this was a non-economic, temporary downturn brought on by the ice storm that hit western Quebec and eastern Ontario.
2. A recent study noted that employment in the gambling industry has been increasing for a number of years (Marshall, 2000).
3. Longer-term trends could not be compared in this section. Owing to changes in occupation coding, the Labour Force Survey data from June 1999 onward are not comparable with prior data.
4. Human Resources Development Canada (HRDC) has assigned a skill level to each detailed occupation within its National Occupational Classification System (NOC). By linking the NOC code with the Standard Occupational Classification code used by Statistics Canada, one can tabulate LFS data according to skill level. For more information on the NOC and HRDC skill levels, see www.hrdc-drhc.gc.ca, then "National Occupational Classification."
5. Class of worker refers only to a person's main job.

References

• Marshall, K. "Update on gambling." Perspectives on Labour and Income (Statistics Canada, Catalogue no. 75-001-XPE) 12, no.1 (Spring 2000): 29-35.
• Picot, G. and A. Heisz. "The labour market in the 1990s." Canadian Economic Observer (Statistics Canada, Catalogue no. 11-010-XPB) 13, no. 2 (February 2000): 3.8-3.17.
• Statistics Canada. Canadian Economic Observer (Catalogue no. 11-010-XPB) 13, no.9 (September 2000).

Geoff Bowlby is with the Labour Statistics Division. He can be reached at (613) 951-3325 or bowlgeo@statcan.gc.ca.

Labour force status of Canada's working-age population

In 2000, the employment rates for youths and core-age women increased the most

The youth unemployment rate, albeit still much higher than that of adults, continued its downward trend

In percentage terms, employment growth outpaced population growth for all but core-age men

Rising labour force participation has nudged up unemployment rates for older persons and core-age women

For three years in a row, youth employment rates have increased the most

In the long term, full-time employment growth has far exceeded part-time, but in 2000, full- and part-time growth rates were almost the same

For the first time since 1986, self-employment fell in 2000

Over the last four years, employment growth has been strong in both manufacturing and trade, Canada's two largest industries. In 2000, gains were also significant in professional, scientific and technical services, and information, culture and recreation, among others

The top three growth industries in 2000 were in the service sector

Over the last four years, natural and applied science occupations increased the most in percentage terms. This group includes computer programmers, systems analysts and computer engineers

With gains in the service industries, sales and service occupations, as well as business, finance and administrative jobs, increased the most. The largest decline occurred in occupations unique to primary industry, related to the drop in agriculture

Since the strong upward trend began in 1997, employment in the largest three cities in the Atlantic region has increased at or above the national level

In percentage terms, job growth was strongest in Ontario in 2000

Almost 6 in 10 newly employed people lived in Ontario

Unemployment rates fell in most provinces in 2000

Of Canada's largest cities, the average level of employment increased most in Calgary and Toronto

Average usual hours were unchanged in 2000. Over the year, the average work week was 36.7 hours

The distribution of work hours was also stable in 2000. Only 59% of all workers put in the standard

Workers in primary industries and occupations worked the longest hours in 2000.35 to 40 hours per week at their main job

In 2000, an average 10% of employees put in paid overtime, up slightly from the year before. The most notable increases were among youths and men aged 25 to 54

Unpaid overtime was also more common in 2000

While overtime workers in the goods sector tended to be paid for their extra hours, most workers in the service sector were not paid for any extra hours

In 2000, the percentage of workers who involuntarily worked part time dropped, while more put in "short" hours because they were going to school

Female employees earned 81 cents for every dollar earned by men in 2000, unchanged from the year before

By industry, employees in utilities made the most. Among all the major occupation groups, managers remained the best paid

The largest drop in the ratio of unionized employees to all employees was in the management of companies, administrative and other support, and transportation and warehousing industries

Over the 1990s, the number of "moonlighters" increased; however, their share of total employment remained around 5%

About 12% of all employees worked on a temporary basis. For youths, the proportion was twice as high and has increased recently

For four years in a row, employment grew at a faster pace in Canada than in the United States

Even after the unemployment rates are harmonized, the gap between the two countries remains

Supplementary measures of unemployment and percentage-point change from 1996 to 2000

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© Statistics Canada - Conditions of  use Published: 2001 01 17