Experts fret Canada becoming a ‘nation of part-time workers’

Growth in part-time jobs has widely outdistanced full-time job growth this year. Justin Sullivan/Getty Images

The revised employment figures for July from Statistics Canada provided some relief to experts on Friday, showing the economy added far more jobs than the federal agency had originally stated.

The headline number of 42,000 was a relative groundswell of job creation last month compared to what StatsCan first and erroneously reported last Friday when it showed just 200 jobs being added.

But the news isn’t as good as it seems.

An unsettling trend still lurks below the surface: Canada continues to bleed full-time jobs this year, while part-time work is rushing in to fill the void.

“Although July’s net employment gain was revised, these were all part-time positions,” David Madani, economist at Toronto-based Capital Economics, said.

READ MORE: StatsCan job error is more awkward than catastrophic  

The latest reading reinforced Madani’s observation that “the economy is struggling to generate good quality jobs.”

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Since the start of the year, part-time work has been growing at clip of 13,000 positions a month, StatsCan data shows, a period in which full time has actually declined, Capital Economics says.

Eighteen thousand full-time jobs were lost last month—well down from what StatsCan’s first reading reported, which was just shy of 60,000. But that’s not exactly something to cheer about.

“The breakdown still shows that Canada is becoming a nation of part-time workers,” Madani said.

The economist isn’t alone in his view.

“The last year has been dominated by part-time [job creation], there’s no question there at all,” Randall Bartlett, a senior economist at TD Economics said.
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What’s puzzling Bartlett and others is that the Canadian economy, while not exactly roaring, has been posting “consistent” and solid growth this year. That should mean more pressure on employers to add full-time jobs, but many apparently aren’t.

“The labour market is generally shifting towards part-time employment in spite of the Canadian economy expanding in each of the first five months of 2014,” Bartlett said.

Experts are debating three reasons why this could be happening.

Give-back from previous strength

TD’s Bartlett says that stronger-than-expected hiring in late 2012 and into 2013 may now be reversing itself a touch.

“We saw a lot of hiring which actually surpassed expectations given what we were seeing in growth at the time. So it might be a pullback by employers after a period of very strong hiring,” the economist said.

Demographic shift

Another factor is the growth of older workers returning to the workforce by taking up part-time jobs. As boomers retire, experts have been surprised by the number who have picked up work to help ease the burden on retirement savings.

The participation rate among those 55 and older has been rising steadily in recent years, experts say. As a share of all part-time jobs, that demographic represents about eight per cent of PT workers now, or double what it was a few years ago.

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“As demographics continue to shift toward an older population in Canada, we may start to see more part-time employment gains than we have in the past,” Andrew Grantham, an economist at CIBC, said.

Growth of ‘precarious’ work

A third factor being considered by experts is so-called precarious work – or the rise of more part-time labour being used by employers in place of full-time positions, which often comes with lower wages and benefits and thus lower costs.

Areas like construction and retail are particularly susceptible to this shift in hiring habits, experts say.

Construction has boomed in recent years but is widely expected to cool as the housing market slows. Builders may now be adjusting how they’re treating employees, a measure to be more nimble if and when a marked slowdown arrives.

Meanwhile, big retailers such as Target have been adding to part-time payrolls as they have opened stores.

“It could be numerous factors. It could be a greater leaning toward certain sectors that have more part-time workers, construction, some areas of retail, which tend to have a greater part-time [workforce],” Grantham said.

But the CIBC economist added, “There are still significantly more people working part time, but still looking for full time jobs, than there was before the recession.”

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