March 2020 Jobs Numbers: A Stark New Reality

A Summary of the Numbers:

Canada’s employment numbers for Canada are grim, and no one could have predicted the precipitous drop in employment figures that Statistics Canada revealed for March 2020. Over 1 million Canadians have joined the unemployed ranks in March, bringing the unemployment rate up to 7.8% from 5.6% just one month prior. To put that into perspective, that’s nearly eight times the record month of unemployment from January 2009, which saw 129,000 Canadians lose their jobs.

For context, the graph pictured here depicts the historic impact of COVID-19 on the Canadian labour market. In addition to the staggering unemployment figures, Statistics Canada found another 1.3 million Canadians were employed, but did not work, and 800,000 more Canadians worked but had their usual hours significantly reduced.

The Full Picture:

The March update uses one week in time as a reference to extrapolate the monthly results. For March 2020, that week was the 15th to 21st of March, which is the week that most non-essential businesses were shuddered for the first time. Since then, COVID-19 has only had more damaging impacts on the economy with most provinces reducing their lists of essential businesses and relief funds only beginning to flow from the Federal government. Therefore, it is likely that job loss figures are even higher than stated in the Labour Force Survey.

For a clearer picture, we can look at the applications to the various Federal relief programs. As of April 9, Prime Minister Justin Trudeau noted that 4.5 million claims have already been processed for the Canada Emergency Response Benefit (CERB). A citizen does not have to be unemployed to qualify for CERB but needs to have experienced a loss of income as a result of COVID-19, meaning the unemployment numbers are likely far higher than Statistics Canada has shown.

The Impact on Women:

An interesting trend revealed by the Labour Force Survey is the number of Canadians that have left the labour force (looking for employment) for personal reasons, such as to take care of family. That number comes in at an additional 450,000 people, showing the toll that COVID-19 and self-quarantine measures are taking on the family unit.

Particularly disheartening is the disproportionate impact of COVID-19 on the female workforce. Dr. Tammy Schirle, Professor of Economics at Wilfrid Laurier University, points out the dramatic increase of full week absences for women in the chart pictured here. Though men have also seen an increase in full week absences, the increase for women, especially under the heading “other reasons”, is noticeably larger.

It remains to be seen if this is due to the type of work Canadian women are in, their role as matriarchs in the family unit, or if this will be a prolonged trend. Regardless, it is a worrying sign for an economy that, as recently as 30 years ago, saw women with post-secondary qualifications employed at a lower rate than men without post-secondary education by nearly 10 points. Though this trend has swung markedly in the other direction, the impact of COVID-19 on service-oriented jobs and caregivers may walk back progress that has been made.

The Hollowing Out of the Middle Class Paused?

Recent employment trends have seen the Canadian economy move away from goods producing measures to a service-oriented offering. That trend has been highlighted by the reduction of traditional middle-class jobs. For example, Ontario shed 70,000 ‘middle-class’ jobs between 2001 and 2015 despite increasing overall employment. Essentially, jobs like accountants and bookkeepers are being replaced by technology will higher skilled jobs in the trades and lower skilled jobs in the service industry remain resilient to technological trends.

COVID-19, however, has attacked the lower skilled jobs that were previously impervious to change. For example, the food service industry employs 1.2 million Canadians, but Restaurants Canada estimates that 800,000 of those employees are now out of work with more to layoffs to come.

This new development poses an interesting thought experiment for the return of higher skilled, more middle-class type jobs. Will those workers who are now suddenly unemployed use this opportunity to develop skills that make them more employable in other classes? Or, will those workers use government assistance programs to ride out the COVID-19 downturn until they can return to jobs like what they once had? If workers pursue the former and not the latter, it could dramatically shift the labour profile of the country for years to come.