One million people or 5% of employed Canadians are now out of work — and that’s just two weeks of data
It is perhaps an understatement to call the unemployment picture across Canada grim.
Roughly five per cent of the Canadian labour force, or one million people, are now out of work because of COVID-19. A further 10 per cent worked less than half of their usual hours, none in some cases, despite technically remaining employed. In Toronto — which has experienced an unprecedented employment boom over the past five years — at least 25 per cent of all jobs have now been wiped out.
But the most remarkable thing about these statistics is that they represent just two weeks worth of data showing the devastation COVID-19 has wrought on the employment landscape. The situation can get markedly worse, and likely will.
Almost seven million to date, more than a third of the number of Canadians who had a job in mid-March have filed for the Canada Emergency Response Benefit
A fuller portrait of the severity of this unemployment crisis will be revealed May 8, when Statistics Canada releases new figures tracking jobs lost by mid-April. The only real-time indication a historic blitzkrieg of job losses is happening is the number of people who have filed for the Canada Emergency Response Benefit: almost seven million to date, more than a third of the number of Canadians who had a job in mid-March.
“The huge amount of support the government is providing has got some blood flowing through the body politic,” said Armine Yalnizyan, economist and Atkinson Foundation fellow on the Future of Workers. “But the longer this goes on, the slower the blood circulates. We might then start seeing amputations.”
How and where these amputations might take place remains to be seen, but the job losses so far have hammered specific sectors such as hospitality and accommodation, food services, retail and transportation. They have also disproportionately affected women and lower-wage workers.
“There’s a pretty clear relationship between earnings and the likelihood you will lose your job,” said David Macdonald, senior economist at the Canadian Centre for Policy Alternatives (CCPA). “A large part of that has to do with the specificity of the non-essential businesses and their closures.”
For example, half a million people in the accommodation and food-service sectors lost their jobs or the majority of their hours, and another 400,000 did in retail, according to an analysis of Statistics Canada employment data by the CCPA. The frontline workers in those sectors often tend to be minimum-wage earners, such as servers at restaurants or retail store employees.
Macdonald’s analysis shows that between February and March, a third of all jobs paying less than $14 an hour were either eliminated or had their working hours decrease by at least half.
“But if you look at the highest-earning decile of our labour force, people earning over $48 per hour, only five per cent of them lost their jobs or the majority of their hours,” he said. “The job losses are clearly focused on the lower end of the earning spectrum.”
It will not go unrecognized from a political standpoint how the ‘have-nots’ in this crisis fell even further behind the ‘haves.’Economist David Rosenberg
In a recent note, economist David Rosenberg warned that this income disparity could have far-reaching effects.
“First, from an aggregate demand standpoint, these low-income people spend most of what they earn,” he said. “Second, it will not go unrecognized from a political standpoint how the ‘have-nots’ in this crisis fell even further behind the ‘haves.’ This will have a future impact on taxation policy; if not, we can expect some sort of civil unrest.”
Source: Vanmala Subramaniam | Financial Post
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