February 2003     Vol. 4, no. 2

Quality of jobs added in 2002

Martin Tabi and Stéphanie Langlois

The labour market in Canada improved considerably in 2002, with employment jumping 560,000 or 3.7% from December 2001 to December 2002. After the slowdown in both economic growth and employment in 2001, almost no one anticipated such a strong performance (Bowlby 2003).

The trend in employment contrasted between the United States and Canada. Employment in the U.S. remained almost unchanged (-0.1%), with the economy growing at a weaker pace than in Canada. The sudden reversal of trend from 2001, robust growth of part-time employment, and the stagnation of the American labour market in 2002 are all reasons to question the quality of the jobs added in 2002.

Job quality can be evaluated in several ways. On a personal level, criteria could include wages, number of hours worked, shift work, place of work, commuting distance, work relationships, and so forth. Each individual may assign a different importance to each factor.

For the economy as a whole, what defines a good job refers more to concepts of productivity. Jobs with higher wages, more hours of paid work, and stability will make a greater contribution to economic growth. This approach has been adopted for this study.

While definite conclusions on the quality of job growth in 2002 are not possible, some indications of the nature of the employment gain can be gleaned from the Labour Force Survey.

Hourly wages

From the perspective of economic growth and productivity, a direct measure of the quality of a job is its wage. Average hourly wages continued to rise in 2002, reaching $17.66. The 2.8% increase between 2001 and 2002 was slightly less than the increases recorded in the previous two years (3.1% and 3.2% respectively).

By way of comparison, the annual average all-items consumer price index (CPI) rose 2.2% in 2002, somewhat less than wages (Chart A). On average, consumers paid 2.6% more for goods and services in 2001 than they did in 2000. In 2000, the average increase was 2.7%.

Through a variety of measures, the distribution of wages remained roughly unchanged in 2002. One broad indicator of wage distribution is the share of employees earning less than the average hourly wage, about 58% each year since 1997.

The rise in real wages and the creation of relatively few minimum wage jobs in 2002 are positive indications of the quality of job growth. In 2002, the total number of employees increased more rapidly (3.6%) than the number working at minimum wage (0.5%). Although seven provinces increased their minimum wage in 2002, the proportion of employees paid at this rate was down slightly from the previous year (-0.1%). At 4.7%, the proportion of employees working at minimum wage remained under the 5% mark for a third consecutive year (Chart B).

Strong growth of part-time work

Part-time employment grew by 7.7% (213,000) between December 2001 and December 2002, the largest annual increase since 1981 (Chart C). Because the increase in part-time employment was almost three times the increase in full-time employment (2.8%), the proportion of part-time employment rose 0.7 percentage points, reaching 19.0%. After reaching 19.8% in July 1993, the highest proportion ever recorded, the share of part-time jobs saw a downward trend until late 2001. In terms of raw numbers, full-time employment increased by a healthy 347,000.

Youths (age 15 to 24) obtained 27% of the part-time gains, almost twice their share of the labour force (16%). The increase of 57,000 part-time jobs for youths is important; part-time employment is often a way for young people to break into the labour market, helping them gain essential work experience.

The increase in the proportion of part-time employees could indicate a less healthy labour market. Part-time work is often seen as a form of underemployment, especially if individuals are working part time as a result of less favourable business conditions.  1 

Despite the recent upward trend in part-time employment, the share of people working part time because of business conditions remained practically unchanged in 2002-about 27%, a drop of 0.6 percentage points from the 1997 to 2001 average.

Hourly wage lower for part-time

Wages for both part- and full-time workers increased in 2002 (Table 1). However, hourly pay grew twice as rapidly for full-timers. At 3.1%, the wage gain among full-time employees was greater than the increase in the consumer price index; but for part-timers, the gain was well below (1.4%).

Number of temporary jobs up substantially

Job permanency is also often viewed as a quality indicator. Permanent jobs, in addition to being more stable, tend on average to be better-paying than temporary jobs.  2 

As a result of slightly stronger growth in temporary jobs (4.4% vs. 3.1%), the proportion of temporary jobs continued to rise in 2002, from 12.8% to 13.0% (Table 2). In fact, the proportion has increased every year since 1997. In the last six years, temporary employment has jumped 30.5% (396,000), while permanent jobs have increased 12.3% (1.2 million).

Although the percentage increase in temporary jobs was greater than in permanent ones between the fourth quarters of 2001 and 2002, the numerical increase was far less-67,000 compared with 345,000 (Chart D).

Since 1997, temporary employment has increased at a faster pace than permanent. However, at the same time, wages for permanent jobs have risen slightly more rapidly (Chart E). In 2002, the average hourly wage increased 2.8% for people in permanent and temporary jobs.

Self-employment once again on the rise

Most of the indicators presented thus far have focused exclusively on employees, who are more numerous than self-employed workers. (Self-employment accounted for 15.2% of total employment in December 2002.) However, self-employment also increased in 2002.

After stalling for just over a year and a half, self-employment grew significantly in 2002 (4.2%, or 95,000, between the fourth quarters of 2001 and 2002) (Table 3). Does such growth signify bad, unstable or less well-paid employment? Since self-employed workers are fairly heterogeneous, the question is difficult to answer. Who joined the ranks of this group in the past year? Did these people become self-employed by default, awaiting a better opportunity?

The professional, scientific and technical services sector has the largest proportion of self-employed workers, and this sector registered the largest increase in self-employment (25,000) between the fourth quarters of 2001 and 2002. Possibly some who became self-employed in 2002 had been salaried employees who decided to work for themselves after the collapse of the high-tech sector (Bowlby and Langlois 2002). Within professional, scientific and technical services, the largest increase was in computer systems design and related services.

Self-employment also increased in health care and social assistance, with a gain of 23,000 concentrated in two sub-sectors: ambulatory health-care services and social assistance. In ambulatory services, the advance was mainly in professional occupations such as physicians, dentists, and pharmacists. The increase in social services was reflected in occupations such as teacher assistants, early childhood educators, and babysitters.

Who gained and lost the most?

Another way to profile employment growth in 2002 is to examine the occupations and industries in which the largest number of job gains and losses  3  occurred between the fourth quarters of 2001 and 2002. Both part- and full-time jobs were considered. The average weekly wage of each group in 2002 was compared with the average compensation of employees in general ($650 per week) to help determine job quality.

The ten largest gainers

Most of the ten largest gainers were full-time jobs with higher than average weekly wages (Table 4). But, retail salespersons and sales clerks working part time in the trade sector showed the largest gain in employment, an increase of 29,000 (12%) between the fourth quarters of 2001 and 2002. However, average compensation per week for this type of job was $149 in 2002-$501 less than for employees in general.

Registered nurses working full time in health care and social assistance ranked second with a rise of 21,000 (14%). In 2002, they earned $936 per week, or $286 more than employees in general. The health-care and social-assistance industry was one of the fastest growing industries in 2002.

Sizeable increases were also evident for other full-time jobs that paid above average, such as elementary school and kindergarten teachers working in educational services, and computer systems analysts working in professional, scientific and technical services.

The ten largest losers

The ten largest losers were almost all full-time, but most had below average weekly wages (Table 5).

Shippers and receivers working full time in trade, and cooks working full time in accommodation and food services experienced the largest job losses, 19,000 (-32%) and 15,000 (-15%) respectively. Shippers and receivers averaged $504 per week, while cooks at $375 averaged even less.

Some well-paid, full-time jobs were lost between the fourth quarters of 2001 and 2002, notably those held by computer systems analysts in the information, culture and recreation industry. In 2002, these employees received more than $1,000 per week, much higher than the overall average.

Overall, the number of computer systems analysts grew by 5,000 between the fourth quarters of 2001 and 2002. The number of self-employed workers in this occupation increased substantially, supplementing the increase in employees in professional, scientific and technical services.

Summary

While the greater proportionate increase in part-time and temporary jobs casts a shadow on the nature of the strong job growth in 2002, the gains were not made at the expense of full-time or permanent jobs. Increases for the latter, while more modest in proportion, were larger in absolute terms, indicating that many good jobs were added in 2002. Although it is hard to determine how many added jobs were good and how many were not, it would be difficult to argue that 2002 was a bad year, considering the overall growth in wages and the sizeable increase in employment spread among different types of jobs.

Notes

1. People working part time because of 'business conditions' would prefer to work 30 hours or more per week; however, because of these conditions, they were not able to find full-time work or had their hours reduced. Conditions include not enough work, a drop in orders, retooling, and cutback in hours to save costs (see Reasons for working part time).
2. Job permanency is based on the intentions of the employer and characteristics of the job, rather than the intentions of the employee. If a job that was formerly considered permanent is ending in the near future because of downsizing or closure, it is still regarded as permanent.
A permanent job is one that is expected to last as long as the employee wants it, given that business conditions permit. There is no predetermined termination date. A temporary job has a predetermined end date, or will end as soon as a specified project is completed. Temporary jobs are sub-classified into four groups: seasonal; temporary, term or contract, including work done through a temporary help agency; casual job; and other temporary work.
3. Self-employed workers are excluded.

References

• Bowlby, Geoff. 2003. "2002-a good year in the labour market." Perspectives on Labour and Income (Statistics Canada catalogue 75-001-XIE) 4 no. 1. January 2003 online edition.
• Bowlby, Geoff, and Stéphanie Langlois. 2002. "High-tech boom and bust." Perspectives on Labour and Income (Statistics Canada catalogue 75-001-XIE) 3 no. 4. April 2002 online edition.

The authors are with the Labour Statistics Division. Martin Tabi can be reached at (613) 951-5269, Stéphanie Langlois at (613) 951-3180; or both at perspectives@statcan.gc.ca.

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© Statistics Canada - Conditions of  use Published: 2003 02 21