Rise of part-time work no reason to worry, TD says
The rise in part-time employment is nothing more than a pullback after companies hired more full-time workers than they needed coming out of the recession, one of Canada's largest banks said Thursday.
Economists Randall Bartlett and Derek Burleton wrote in a research note that there's no reason to be concerned about the recent trend.
According to the latest official jobs data from Statistics Canada, the economy cranked out more than 60,000 new part-time jobs in July, even as full-time employment decreased.
July's data was no blip, either. Since the start of the year, more than 60 per cent of the 95,000 jobs created have been part-time work as opposed to full-time.
That has some analysts starting to worry about the long-term impacts of that, as part-time work is generally associated with lower wages, less generous benefits and a much more temporary work force.
Typically in recessions, employers favour part-time workers over full-time positions, as companies like to keep their work force more lean and nimble to deal with coming uncertainty. When recessions end, companies tend to hire a lot of full-time workers as they expand and feel optimistic about their prospects in a growing economy.
That's what happened a few years ago, the bank notes, which makes the recent trend toward part-time work understandable as companies may have ove-reached a little.
"The gains in full-time jobs in 2012 and 2013 appeared outsized relative to output growth, suggesting that some of this year's softness represents some payback," the TD report said.
There may be disproportionately more part-time jobs being created at the moment, but in the overall economy, full-time work still makes up 80 per cent of all jobs, the economists note.
There are also numerous demographic reasons for the slight shift toward part-time work, and they, too, are nothing to worry about, according to TD's economists.
Official data suggests about 70 per cent of part-time workers are female. Many more Canadian women are now in the work force than there have been historically, the bank notes, and as that trend continues "the part-time share of total employment could continue to head higher over the longer run as a result."
Canada's aging population is also playing a role. About eight per cent of part-time workers in Canada today are at least 65 years old. That ratio has doubled over the last 10 years, a time when the seniors' share of the population as a whole has only increased from 16 to 18 per cent.
It's a well-reported trend that Canadians are working later in life than they used to. But by and large, most of them are choosing part-time work when they do, which is skewing the overall ratio higher.
Still, that's not to suggest that all of those part-time workers are doing so voluntarily. The report acknowledges that the category known as "involuntary part-time workers" — people who only work part-time but would like more work — now numbers close to a million people. That's well up from 650,000 during the recession.
"Notwithstanding some of the structural trends at play that could lead to a gradual increase in the part-time share over the longer haul, we expect to see both stronger job gains and a more equitable distribution between full-time and part-time positions in the coming months," the economists say.