2020 Job Losses Were All In Low-Paid Work
During 2020, thousands of jobs were lost due to the economic downturn sparked by the global health crisis, and new research suggests all Canadian job losses had something prominent in common: they all paid CA$27.81 an hour, or less. But worse even, the biggest number of jobs were lost among those Canadians earning the very lowest wage-per-hour on the pay scale – those earning an hourly wage of less than CA$13.91.
Published by CIBC Economics, the findings are based on Statistics Canada data that shows every single job lost in 2020 had counted among those workers earning below-average wages. But what the research shows most prominently of all, is the ever-widening income gap in the country, and one made only that much worse by a modern-day global recession.
Part-Timers Were Hardest Hit
Most of the jobs lost in 2020 had been lost among temporary workers and part-timers. The unemployed were hard hit too, according to the CIBC report. The anomaly, however, was that higher-income Canadians actually experienced job increases. This net gain essentially masked the sharp drop in employment among low-income earners, the bank’s report reveals.
But while top jobs grew, Canadians’ ability to spend largely diminished. And according to CIBC deputy chief economist Benjamin Tal, this had led to a precarious situation of close to CA$100 billion of excess money remaining in savings on the sidelines, which only further underlines the widening gap between Canada’s wealthy and poor.
Tal also points out that last year’s economic crisis was, not unlike every other crisis, an accelerator of existing trends. And that the widening of the income gap between rich and poor had been no exception to the rule.
Better Days Are Coming
But despite the ever-widening income gap, Tal also says there’s a silver lining. According to the bank’s forecasts, the country’s unemployment rate is expected to plummet to below 7% by the end of 2021. This is a massive improvement when compared to the 9.4% reported by Statistics Canada early in Feb.
Although some of the extra money sitting on the sidelines will remain unspent and under-utilised, that which will get spent will go towards the country’s service sector, Tal explained. And since that’s exactly the number one area where the jobs are most needed, the forecast is really good news for the country’s economy and lower-income earners indeed.
In the end, it will be the pent-up demand that will create a welcome rebound in the country’s economy, said the economist.