The overall quality of Canadian jobs has basically held steady during the current economic downturn, according to a report released today by CIBC's Employment Quality Index.

The bank's EQI program studies factors such as 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.

In its estimation, even though the Canadian economy has lost 356,000 jobs, or 2.1%, of the national workforce since last October, job quality has declined by a mere 0.2%.

"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 report author and senior economist Benjamin Tal.

By contrast, he explained, during the 1991 recession, "the 3% drop in overall employment coincided with a 7.7% drop in the quality of employment."

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," Tal added, "is the significant decline in employment among young Canadians. Total employment among workers age 20-24 fell by 4.2% over the past year and by 2.9% 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."

As well, Tal says the Canadian experience in the current recession is very different from the situation in the U.S., "where the quality of employment has fallen by 6.4% over the past year and by 4.2% in just half a year."

Arguably the most positive aspect of CIBC's report on the relative stability of the EQI during one of the most challenging recessions in the post-war era is the role of women in the labour force.

So far, while male employees' jobs have declined by 3.3%, employment for female workers has remained virtually steady. "And," Tal points out, "the fact that many of these women hold relative high-quality jobs was an important factor behind the resiliency of our quality index."

Other key trends affecting job quality in Canada cited in the report include:

• While full-time employment fell dramatically over the past year, part-time employment rose 3.5%, with most of the gains coming during the past six months;
• Over the past year, paid employment fell 2.1% while self-employment rose 1.5%. Self-employment has remained constant since last October 2008, while paid employment has fallen by 2.4%;
• 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 is continuing to rise.

All in all, Tal concludes, "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 full CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/eqi-cda-20090415.pdf

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