Changing Work Landscapes in Canada (1981 to 2019)
Today we’re going to look at a really important topic…how the work landscape has changed over the past nearly four decades in Canada. These results lead up to where we are today…at an inflection point caused by the COVID-19 health crisis.
When we look at the data we see that there are many large structural shifts that have unfolded since the early 1980s. The largest trends include the type of industries that we work in, the structure of these jobs and changes to other areas like unionization and pensions. These changes are also heavily affected by gender and age.
Change of Industry
The first big change is one that we’ve heard a lot – the loss of manufacturing jobs.
This is due to many different reasons, including technological changes, globalization, and even changing consumer preferences. Without going into the causes, we see a sharp from drop for those employed in the industry – nearly 20% of the population was employed in this sector in 1981 and now it’s sitting at 10% of the workforce in 2019.
This is obviously a massive drop – once there was 1 in 5 people involved in manufacturing and now there is only 1 in 10.
The largest demographic that was affected during this shift was males aged 25 to 34 who had a shift of nearly 14% of all workers in this group to other industries.
Any this makes sense when we look at the actual economic output of manufacturing. We see a fairly steady increase in output of around 2% per year until the early 2000s where it starts to stagnate and then eventually bottom around the beginning of the great recession which began around 2007. Since then it has struggled to make a comeback which it had only to be hit by COVID-19.
Looking at the most up-to-date statistics, manufacturing output from April of this year is nearly 24% less than December 1997 – the staring date of the data set that I was using – since then then the economy seems to be getting better, but this is a very frightening statistic.
The job landscape for manufacturing is very similar to this data. We see mild job loss in manufacturing until the 2000s that then drastically increases in the 2000s.
So Where Did All of These Workers Go?
The shift away from aggregate employment in manufacturing was made to a variety of different industries – some varying by gender. However, both males and females heavily shifted into professional, scientific and technical services.
For females, there was a shift in fields related to public administration, education, health care and social services. It was also noted that there is also a large shift of 6% of the female workforce away from clerical work since 1989 due to technology.
For men, the largest shift is to construction, retail trade, accommodation, and food services. With some of the changes most pronounced for younger males.
Change in The Structure of Work
Since 1981, the structure of work has also changed quite heavily. One of those changes, is the reduction of jobs that are both permanent and full-time work. This drop is most felt by men and younger females – with all working-age men seeing a total workforce decline of over 6%. Females over 34 actually saw an increase of around 5%.
It’s important to point out that even though there was a decline for males, the percentage of males working in in full-time and permanent work is still over 10% higher than females.
We also see similar gender changes to median real hourly wages. For females, there was a 20% increase for those under 35 and 38% for those older. On the other hand, young males saw almost no increase and older men say an increase of 13%.
Yet again, these changes are really narrowing workplace gender pay gaps. Males aged 25 to 34 have real median hourly wages that is $2 more per hour than their counterpoint females. This gap than grows to nearly 5$ for those 35 to 54.
Increased Gig Work
One of the other big changes we see is the increased usage of the gig economy – which is basically independent contractors that perform short-term work. These positions can have many perks but often lack work protection and any types of benefits.
Studies have shown that the gig economy increased from 5.5% in 2005 to 8.2% in 2016 and will have increased more drastically since then.
Unfortunately, the gig economy is also associated with high worker turnover. It was found in the same study that roughly 50% of those that entered the gig economy did not last a year.
The number of unionized jobs has also drastically dropped. In 1981, 38% of jobs were unionized while in 2019 it has dropped to 29%.
This drop was most dramatically felt by males where unionized jobs dropped by nearly 20% for young men.
The only demographic that saw an increase in unionization was females between the age of 35 to 54. This is generally attributed to their increased employment in healthcare, education, and social services.
It’s also no real surprise, but the percentage of workers that also had pensions has declined since 1981. Over this time, we saw a reduction of 7.5% of Canadians that had some sort of pension – most commonly a defined benefits plan, defined contribution plan, or group plan.
The gold standard of pensions called defined benefits fell more drastically – over 26% for men and just over 4% for females. Defined benefit plans are usually considered to be the best type of pension because in most cases you are guaranteed to receive a set pension amount upon retirement and the risk of the performance of the pension and any shortfalls is not the employees concern.
To explain the spread between males and females, defined benefits are more readily offered in education and healthcare fields – both industries that have seen a larger increase in female employment.
So this leaves us where we are today – a world with many uncertainties. No one really knows how the COVID-19 health crisis will impact our employment landscape but many believe that it will speed up the transition to various types of technology like increased automation and AI.
Arguments are made in support of technological changes and against these changes. Arguments that we’ll be putting aside for today but cannot be taken lightly. The employment shifts are fairly inevitable and it’s important that we have proper framework to support those that are affected by the transition and that we learn from the large transitions
The amount of people working with working from home arrangements will also likely increase – especially if a vaccination takes a long time to be developed.