indicatorThe Owl

Two different pandemics

The number of low-wage jobs is still down while high-wage employment is up

By ATB Economics 12 February 2021 2 min read

We know that some sectors have been hit harder by the pandemic than others.

Grocery stores have, for example, remained open throughout the pandemic and have benefited somewhat from more people eating at home. Restaurants that rely on in-person dining have, conversely, faced an array of challenges and have been forced to lay off staff.

Another way to view the impact of the pandemic is to look at how employment has changed for workers at different wage levels. When we do this, a large gap is evident between those with high-wage jobs and those at the lower end of the compensation continuum.

The number of jobs* in Canada that pay $30 or more per hour dipped slightly during the spring lockdown, but were 9.5 per cent higher in January 2021 than in January 2020. There were, in fact, over half a million more jobs at the upper end of the pay scale in January 2021 than before the pandemic began.

The story is very different at the other end of the scale. The number of jobs paying less than $12 per hour (the minimum wage is below $12 in only three provinces: Saskatchewan, Manitoba and New Brunswick) dropped sharply in the spring and was down by 33.5 per cent (88,600) in January 2021 compared to 12 months earlier.

Looking at those making between $12.00 and $19.99 per hour, the number of jobs plummeted by a third in April 2020 compared to the start of the year and was still down by 19.5 per cent (973,100) as of January 2021.

Clearly, the first jobs to go in Canada during the pandemic were those at the lower end of the pay scale and they remain down due to the ongoing persistence of the virus and the measures aimed at containing it.

For those Canadians able to work from home or in sectors deemed essential, the impact of the pandemic has been very different with employment up strongly among higher-wage earners.

This points to what is likely to be a K-shaped recovery after the pandemic recedes. One branch of the K will be higher-wage workers who didn’t lose their job. This group will be anxious to “let loose” after COVID and will boost consumer spending.

The other branch will be formed in part by workers who either return to low-wage employment or remain out of work because their former employers have permanently closed.

So while the post-pandemic period may feel like the Roaring 20s to some, it will be hard going for many other Canadians.

*Provincial data are not readily available. The statistics refer to employee positions only and do not include self-employment.

Answer to the previous trivia question: Russia has the largest natural gas reserves in the world. According to the U.S. Energy Information Administration, Russia has about 24 per cent of the global total. Canada is 17th at about 1.0 per cent.

Today’s trivia question: In what year did the third Monday of every February become officially known as Alberta Family Day?

The number of jobs in Canada that pay $30 or more per hour were 9.5 per cent higher in January 2021 than in January 2020

The number of jobs in Canada that pay $30 or more per hour were 9.5 per cent higher in January 2021 than in January 2020

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