‘If you were hit, you were hit very hard’
Vulnerable got walloped by virus as top earners thrived, economist finds
It was the tale of two economies.
When the toll of the global COVID-19 pandemic swept through the Canadian economy, thousands of jobs were lost, and entire sectors were devastated.
But the economic pain wasn’t felt equally, a new analysis of data by CIBC shows. People in temporary work, older workers and low-wage workers were far more likely to have lost their jobs in 2020, says CIBC deputy chief economist Benjamin Tal.
“This was the most asymmetrical recession in Canadian history,” said Tal. “It was narrow, but very, very deep. If you were hit, you were hit very hard.”
Analyzing data from Statistics Canada, Tal found that more than half of the job losses last year were from people who had temporary work; 31 per cent of unemployment is among people who are self-employed; and all job losses were among people who had lower than average wages.
The highest income earners, meanwhile? They actually saw their employment rise, Tal pointed out.
“High-income earners built up a lot of extra money during this recession because they couldn’t spend it on things they usually do,” Tal said.
The wage gap, says Tal, is growing worse than it ever has, and a lot of it is because of the expanding gig economy, which features temporary, self-employed workers in service jobs with low wages.
“This shows that we need to build a system that protects workers in the gig economy, because that’s taking a growing share of the economy,” said Tal.
Already, Tal says, some of the elements of that system are taking shape in the form of tweaks to Employment Insurance, the since-expired Canada Emergency Response Benefit and other income supports for workers not previously covered.
“I think that’s what we’re doing right now, is building a system that protects more people in the gig economy,” said Tal.
Labour advocates and progressive economists agreed with Tal’s assessment.
“Every recession is unfair. But the COVID recession is extreme in that regard. The pandemic shone a spotlight on fractures in our labour market,” said Jim Stanford, an economist with the Centre for Future Work.
While many people in customer-facing jobs, such as retail or the hospitality industry, lost their jobs because of Covid-related restrictions, and others in service-related gigs simply couldn’t afford to stay home, many white-collar workers could keep doing their own work, Stanford said.
Deena Ladd, executive director for the Workers’ Action Centre, said the pandemic has shown that a stronger system of financial supports for workers, including paid sick leave, are also a matter of public health.
“All the precarious work issues led to some of the horrendous outbreaks that we saw in long-term-care homes,” said Ladd, pointing to low wagers, which meant personal service workers needed to take multiple jobs to survive, and in many cases, make do without paid sick leave.
Ladd also hopes some of the programs designed by governments to deal with the Covid-caused economic crisis become permanent. CERB, which was open to far more workers than standard EI, is a good example of what’s needed, Ladd said.
While she’s not counting on necessary changes becoming permanent, she said she’s gratified to see things like paid sick leave and universal basic income being discussed by people other than labour advocates, unions and progressive economists. That, she says, is a sign of hope.
“We’re seeing greater interest and allyship than we did before,” said Ladd.