Is Job Quality Really Improving?
The widely publicized CIBC Employment Quality Index would have us believe that average job quality has been improving this year even as the pace of job creation has slowed down, and even as the national unemployment rate has risen from 6.0% to 6.2%. http://research.cibcwm.com/economic_public/download/eqi-cda-20080716.pdf
I wonder if this is due to the realities of the job market, or due to the peculiarities ofÂ the way in which this rather opaque index is constructed.
In point of fact, according to the Labour Force Survey, almost two-thirds of the net new jobs created between December, 2007 and June, 2008Â – 83,500 of a total of 127,000 – were part-time jobs.Â It’s true that self employment fell by 31,500 over the same period while paid employment rose by 158,000 – but its a mystery to me why a modest shift from self employment to paid jobs in a context of very disproportionate part -time job growth would register as an improvement in overall job quality.
The Index apparently shows that net job growth has been concentrated in relatively well-paid industrial sectors.Â True to a point, but that’sÂ mainly because ofÂ the relative health of spending on public and social services – employment in public administration and health care and social assistance combined is up 42,500 since December, representing more than one in five of the new jobs – plus continued job growth in construction (up 58,000 from December to June.)Â Â However, the construction sector job boom seems to be coming to an end, with 16,000 jobs lost last month alone.
The key message from the Labour Force Survey data is that unemployment has been rising, job growth has been slowing, and new full-time jobs are very thin on the ground.Â It takes a strange kind of index to turn that into a good news story.