Job quality falling as wage gap grows for 61% of Canadians, CIBC finds

The quality of employment in Canada is falling, according to a report from CIBC, with more low-paid jobs and those earning less than the average wage falling further behind..

Both young people and Canadians over 55 are stuck in the low-wage job sector, primarily in service jobs. But even among workers aged 25 to 54, 53 per cent had jobs that paid between 50 and 100 per cent of the average wage.

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The report by CIBC economist Benjamin Tal found that jobs created since 2003 in Canada are more likely to be low-paying.

Using figures from Statistics Canada, Tal found that the share of workers who are paid below the average wage has risen over the years to just under 61 per cent in 2015.

Gap in wages growing

It's those workers in the middle-wage spectrum, earning less than the average wage but not minimum wage, who are falling behind.

And while rising rates of minimum wage have helped the poorest workers, the gap between middle and high-income people is not closing.

"The good news is that those at the lowest end of the wage spectrum are seeing relatively healthy wage gains — not due to bargaining power but mostly due to policy changes regarding minimum wages," Tal says in the report.

"But the group closer to the middle of the wage spectrum have seen sub-par growth throughout the entire cycle."

That makes Canadian households more fragile in the face of economic shocks, as they are less likely to have extra cash on hand, Tal said.

Steady deterioration

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.

Those most likely to do part-time work are over age 55, with more than 60 per cent of older workers in part-time jobs. That may reflect a preference, but it also may reflect the lack of opportunity for that age group.

While jobs with above average pay continue to have high pay, and pay continues high in sectors such as logging, mining, electronics and transportation, that's not where the new jobs are, Tal says.

Instead, they are in service and retail sectors, which pay less than the average wage.

At the same time, only 15 per cent of workers aged 15-24 are even in the workforce, a decline over the last 20 years. Younger workers do tend to have lower pay, but with fewer jobs opening up in higher paid sectors, they are not seeing an opportunity to earn more.

Automation to destroy more well-paid jobs

In a separate report, the Mowat Centre predicts millions of Canadians may lose their jobs to automation in the next decade, including truck and taxi drivers who could be replaced by self-driving vehicles.

Those who are working could see their full-time positions replaced with short-term, temporary gigs.

The University of Toronto-based think-tank says Canada must embrace new technologies to be competitive, but cautions there may be an increase in income inequality.

Those who work in highly skilled areas — including science, technology, engineering and mathematics — are likely to work longer hours and maintain high incomes, but many others will see work become more precarious.

Authors Sunil Johal and Jordann Thirgood say Canada will have to adapt its social safety net to these changes, including pensions, the employment insurance system, benefits not covered by health plans and training.