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Job Quality – Canada – 2015 – Analysis an Commentary
Paul Young | Paul Young CPA, CGADate: December 1, 2016
Agenda What is Job Quality Job Market Trends GDP Forecast GDP Key Industry Indicators Employment Wages
Job Quality On average, a person from an OECD country spends 37 hours a week at work, and an increasingly larger share of
their adult lives in paid-work. Therefore, work is strongly related to the quality of individuals’ lives and their well-being. Moreover, quality jobs are an important driver of increased labour force participation, productivity and economic performance. The OECD has developed a framework to measure and assess the quality of jobs that considers three objective and measurable dimensions. Together, they provide a comprehensive assessment of job quality.
Earnings quality captures the extent to which earnings contribute to workers' well-being in terms of average earnings and their distribution across the workforce.
Labour market security captures those aspects of economic security related to the risks of job loss and its economic cost for workers. It is defined by the risks of unemployment and benefitsreceived in case of unemployment.
Quality of the working environment captures non-economic aspects of jobs including the nature and content of the work performed, working-time arrangements and workplace relationships. These are measured as incidence of job strain characterised as high job demands with low job resources.
Source – http://www.oecd.org/statistics/job-quality.htm
Earnings Quality
Changes in Labour Market Security
• Labour market security worsened in most OECD, reflecting the combination of a substantially higher risk of unemployment with lower unemployment insurance. The fall was most noticeable in Spain and Greece
Comments – Job Quality “So, the Harper government has failed to achieve meaningful economic growth. What does that mean for
the middle-class? It means weak job creation. The government brags about stale job numbers that are 3 and 4 and 5 years out-of-date. The reality of jobs growth last year was a 60% drop from two years earlier. Unemployment is projected to remain high. Long-term joblessness is getting to be a particular problem. Job quality is also on the decline. The CIBC says it’s at a 25-year low. Involuntary part-time work is rising. Another 28,000 full-time jobs disappeared in the latest StatsCan survey last Friday.“ - Ralph Goodale – Comments - http://www.macleans.ca/politics/for-the-record-ralph-goodale-on-the-economy/
“The deterioration in job quality has been steady over the past 10 years, the report said, with the number of part-time jobs rising to 20 per cent of all jobs during the 2008-2009 recession. It's barely fallen since then, with more than 19 per cent of jobs part-time - Source - http://www.cbc.ca/news/business/wages-cibc-job-quality-1.3872389
November 2016 – Labor Market Survey “The Canadian labour market topped expectations by adding another 10,700 jobs last month and dropping the unemployment rate to 6.8
per cent — but the latest numbers raise questions about the quality of the work. Statistics Canada's November employment survey showed yet another monthly decline in full-time work — a figure more than offset by a gain in part-time jobs. The report Friday said the market added 19,400 part-time jobs last month and shed 8,700 full-time positions. See more at: http://www.princegeorgecitizen.com/part-time-work-fuels-canadian-job-growth-again-as-jobless-rate-dips-to-6-8-1.3597992#sthash.Gku1yVK6.dpuf” Source – http://www.princegeorgecitizen.com/part-time-work-fuels-canadian-job-growth-again-as-jobless-rate-dips-to-6-8-1.3597992
What is government role in improving job quality? Promote skills development Income taxation
Taxation rates Capital Gains Interest Income Consumption Corporate Business Taxation
Create the conditions to attract FDI Reduce red tape Cap hydro rates Managed taxation rates
GDP Forecast
Source – Scotiabank
Summary – September 2016 – GDP – Canada Canadian real GDP rose at a 3.5% annual rate in Q3, basically on consensus and a nice rebound from the
wildfire-induced 1.3% drop in Q2 (revised slightly stronger from the initial reading of -1.6%; Q1 was also revised up by 2 ticks to +2.7%). The comeback was led by an 8.9% snapback in exports (largely reflecting a return to normal oil production levels, and not a burst in other sales), with some notable support from capex, inventories and consumer spending. The latter rose at a 2.6% annual rate, the best quarter in a year. Notably, we continue to wait for serious signs of the much-vaunted federal stimulus package, as government consumption fell at a 1.2% a.r. and public investment was only moderate at +2.6%. Housing also dragged on growth, dropping at a meaty 5.5% clip. One real ray of sunshine was the fact that business spending on M&E and structures rose 3.5%, its first gain in two years. Source – BMO
When it comes to economies, what goes down usually comes back up, and Canada is no exception. The resumption of activity following the May wildfires in Alberta delivered the fastest pace of economic growth since the end of 2014. Canada has regained back the ground lost in the second quarter, and then some. Beneath the surface however, lies an economy that continues to struggle to find new sources of growth. The bulk of the gain both in the quarterly and monthly figures can be attributed to one-offs. Absent the post-wildfire resumption of energy production, the quarter would have likely been much weaker. Indeed, business investment, which had been expected to 'bottom out', instead continued its decline, which would have been worse absent a one-off module delivery for the Hebron offshore project. Indeed, the 0.3% monthly number notwithstanding, momentum heading into the end of the year appears soft as GDP excluding energy gained just 0.1% in September. Only a marginal improvement in the rate of growth is expected in 2017. Source – TD Economics
Job Quality Issues Canada vs- Spain and Greec
Spain move to green economy - http://www.nytimes.com/2016/05/03/upshot/spains-jobless-numbers-almost-look-like-misprints.html
Greece has systemic issues - https://www.ft.com/content/30c6d3c0-b18a-11e6-9c37-5787335499a0
Canada –vs- Scandinavia – source - http://www.slideshare.net/paulyoungcga/scandinavia-vs-canada-economic-and-social-policies-november-2016 Scandinavia has high consumption taxes Scandinavia is struggling to compete with low cost jurisdiction
Canada –vs-Germany Germany has a solid apprenticeship program Canada education system is not align with the job market
GDP by Industry Segment
Source – Stats Canada Source – BMO
GDP / Expenditure
Facts:• Infrastructure spending has not flow to projects across Canada• Consumer spending continues to grow but will face pressures due to carbon taxation (Ontario
and Alberta)• Business Investment seen a spike due to oil equipment purchase. Business are to hesitant to
invest due both slow growth globally as well as government policies (Hydro Rates and Red Tape)
Canada Employment
Comments:• There 64K less goods producing jobs as compare to December 2015. Low commodity prices have impacted oil/gas as well
as the mining sector• Service sector jobs lead the way which bulk of the hiring in areas like healthcare and public administration• Part-time jobs are leading the way in terms of new jobs.
• Liberal comments “At a recent meeting of Liberal Party insiders, the finance minister said government must do a better job of adapting to the changing workplace. Morneau suggested precarious work is here to stay, and that Canadians and their governments better get used to it. source - http://spon.ca/bill-morneau-is-half-right-about-precarious-labour/2016/10/30/
Canada Employment
Comments:• Wage growth has been very sluggish in 2016• Cut backs to healthcare have impacted wages• Many governments have hiring freezes and/or wage freezes
• Liberal comment - Wages are based on market conditions. If government impose carbon taxation and/or CPP hikes then that will influence what business can afford to pay to their employees Source - http://www.rcinet.ca/en/2016/03/09/guaranteed-income-coming-to-canada/
Federal Government / Fiscal Monitor comments
“The federal government ran a $7.8-billion deficit through the first half of its fiscal year, compared to the surplus of $1.6 billion it posted over the same time frame last year.“ Source - http://www.cbc.ca/news/business/fiscal-monitor-surplus-deficit-1.3868091
“This is due to a 5.3-per-cent increase in elderly benefits due to demographics, a 7-per-cent increase in Employment Insurance benefits, and a 15.4-per-cent increase in children’s benefits due to the new Canada Child Benefit.”Source - http://www.theglobeandmail.com/news/politics/ottawa-runs-78-billion-deficit-over-first-half-of-year-due-to-spending-hike/article33048253/ Comments are missing a few factors
Indigenous spending is up 13% for 2016-2017 - Key Quote “And yet, a growing number of indigenous leaders are coming to the conclusion that such lofty rhetoric is sounding increasingly hollow, that it does not match the record of the Trudeau government’s first year in office. “Absolutely,” said Kevin Hart, the Manitoba regional chief for the Assembly of First Nations. “(Indigenous) leadership across this country are coming to terms with that. There was a lot of great talk in the last year.” Source - http://news.nationalpost.com/news/canada/canadian-politics/from-housing-to-health-trudeaus-rhetoric-on-first-nations-files-out-of-step-with-reality-say-some-critics
Military spending is up 7.3% - “Canada will be under pressure to expand spending on military “- Source - http://globalnews.ca/news/3063586/donald-trump-nato-canada-defence-spending-trudeau/
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