Recession not damaging Canadian job quality: CIBC



    Bulk of job losses in low-paying positions

    TORONTO, April 15 /CNW/ - CIBC (CM: TSX; NYSE) - While Canadian jobs are
disappearing at a rate not seen since the 1982 recession, the current
recession has not hurt the employment quality of the remaining Canadian jobs,
finds a new report from CIBC World Markets Inc.
    Since October 2008, the Canadian economy has lost 356,000 jobs or 2.1 per
cent of the national workforce. However, over the same period Canadian job
quality has basically held steady, declining a trivial 0.2 per cent according
to CIBC's Employment Quality Index (EQI). The bank's EQI ranks job quality by
assessing a number of factors including the distribution of part-time vs.
full-time jobs; self-employment vs. paid employment; and the compensation
ranking of full-time paid employment in more than 100 industry groups.
    "The relative stability of employment quality during the current
recession is at odds with not only the pace of job losses in the economy, but
also the trajectory seen during previous recessions," says Benjamin Tal,
senior economist and author of the report.
    "During the 1991 recession, the three per cent drop in overall employment
coincided with a 7.7 per cent drop in the quality of employment. The Canadian
experience this time around is also very different than the situation in the
U.S. where the quality of employment has fallen by 6.4 per cent over the past
year and by 4.2 per cent in just half a year."
    Mr. Tal attributes the surprising strength in Canadian employment quality
to the fact that the bulk of job losses to date have been in low-paying
positions. "To be sure, the number of high and low-paying jobs fell
dramatically over the past six months, but the damage was more pronounced
among low-paying jobs.
    "One reason behind the fact that employment in low-paying sectors is
falling faster than in high-paying ones is the significant decline in
employment among young Canadians. Total employment among workers age 20-24
fell by no less than 4.2 per cent over the past year and by 2.9 per cent over
the past six months alone. And since many of these young workers are in
sectors or occupations that earn less than the average wage, this trend worked
as a positive for the quality measure."
    But the key factor in the relative stability of the EQI during one of the
most difficult recessions in the post-war era is the role of women in the
labour force. Not only has the employment rate among women risen dramatically
over the past decade, so has the quality of the jobs they hold. The number of
women in professional occupations in business and finance has risen by no less
than 50 per cent over the past decade -- more than double the rate seen among
men. The same can be found in many other sectors such as public service and
the social sciences.
    "And so far, women are faring much better than men during this recession,
with total employment among women hardly changed over the past year vs. a 3.3
per cent drop among men," adds Mr. Tal. "And the fact that many of these women
hold relative high quality jobs was an important factor behind the resiliency
of our quality index."
    The report also identified a number of key trends affecting job quality
in the country.

    
    -  Full-time employment fell dramatically over the past year, while
       part-time employment rose 3.5 per cent -- with most of the gains
       coming during the past six months. This had a negative affect on
       the EQI.
    -  Over the past year paid-employment fell 2.1 per cent while
       self-employment rose 1.5 per cent. Since October 2008, self-employment
       has remained constant while paid employment has fallen by 2.4 per
       cent. Given that on average, the self-employed earn less than 80 per
       cent the income of paid employees, this trend worked as an additional
       negative pull on the index.
    -  Western Canada is clearly showing the fastest rate of deterioration in
       the quality of employment, reflecting economies that are rapidly
       losing momentum.
    -  In Ontario, growth in the quality of employment is now in negative
       territory, but only to a limited degree -- despite the massive job
       loss in the manufacturing sector.
    -  The quality of employment in Quebec and Atlantic Canada continues to
       rise.
    

    Mr. Tal notes that while the Canadian economy, including the Canadian
labour market, will continue to deteriorate in the coming months, the strength
of job quality bodes well for the future. "The relative stability of our
employment quality index suggests that when the labour market turns a corner,
job gains will translate into income gains much more quickly than they have in
the past, as the base of the existing labour pool is of a higher quality when
compared to previous recessions."

    
    The complete CIBC World Markets report is available at:
    http://research.cibcwm.com/economic_public/download/eqi-cda-20090415.pdf
    

    CIBC's wholesale banking business provides a range of integrated credit
and capital markets products, investment banking, and merchant banking to
clients in key financial markets in North America and around the world. We
provide innovative capital solutions and advisory expertise across a wide
range of industries as well as top-ranked research for our corporate,
government and institutional clients.




For further information:

For further information: Benjamin Tal, Senior Economist, CIBC World
Markets Inc. at (416) 956-3698, benjamin.tal@cibc.ca or Kevin Dove,
Communications and Public Affairs at (416) 980-8835, kevin.dove@cibc.ca


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