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Job seekers line-up at various booths at the National Job Fair and Training Expo in the Metro Toronto Convention Centre.Fernando Morales/The Globe and Mail

Employment has bounced back from the recession, but behind that rosier picture lies a labour market still in the midst of a painful healing process.

Employment rebounded more quickly after the last recession than following prior downturns, a new analysis by Statistics Canada shows. The labour market took 27 months to fully recover from its level in October, 2008, compared with 39 months in the early 1980s, and 52 months in the early 1990s.

But today's employment landscape looks dramatically different than it did before the downturn: The number of jobless people rose by 800,000 between October, 2008, and October of last year. More people are involuntarily working part-time, and long-term unemployment has surged - to nearly a quarter of jobless people, from 15 per cent before the downturn.

That surge is particularly worrisome. Long-term joblessness "can impair an individual's ability to find a job when the economy improves," said the authors, Jason Gilmore and Sébastien LaRochelle-Côté. "It can also affect stress levels and psychological well-being, and household finances often deteriorate, especially for those who exhaust their employment insurance benefits."

Among the long-term unemployed, the number of people without a job for at least a year doubled during the two-year period.

Still, long-term joblessness remained below levels hit in prior recessions.

Job losses through the recession also didn't hit all demographic groups equally. "Younger workers, men, and individuals with lower educational attainment experienced disproportionate job losses," the authors said in a report titled "Inside the labour market downturn."

Canada's official jobless rate has ebbed to 7.8 per cent. But a broader measure, which captures discouraged workers and involuntary part-timers and is also known as the "underutilization" rate, was 10 per cent in October, 2010 - not much improved from a year earlier.

Employment in the last recession fell faster initially than in prior downturns, but recovered more quickly, they said.

Layoffs were more scarce in the last recession as companies hung on to workers. The number of permanent layoffs rose 30 per cent in the recent two-year period, compared with increases of 57 per cent in the early 1990s and 116 per cent in the early 1980s.

Full-time jobs evaporated, forcing more people into part-time jobs. There were 113,000 fewer full-time positions in October, 2010, than two years prior, and the number of involuntary part-time workers swelled by 20 per cent in the two years.

Unemployment rose. Of that increase, new entrants and re-entrants into the labour market accounting for nearly half of the increase.

The number of "non-participants" in the labour market rose by nearly half a million people, with students and seniors accounting for the bulk of that gain.

Canada's jobs market fared much better through the recession than the U.S. Both countries began with a similar jobless rate of about 5 per cent. At the end of last year, the jobless rate was stuck over 9 per cent in the U.S. The comparable rate in Canada was just under 7 per cent.

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