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Why Canada’s jobs picture is much rosier than you thought

Canada's disappointing June employment report didn't so much highlight the problems with the labour market, as it did the problems with how we tally it. If we stopped counting part-time jobs as being equal in weight to full-time jobs, we'd quickly see that this is not nearly as stagnant a job market as it's so often made out to be.

The June numbers, released Friday by Statistics Canada, showed a decline of 9,400 jobs in the month. On the surface, it looked like the latest in a string of crummy job-growth results, further cementing the belief that Canada's labour market has ground to a discouraging halt.

But within that June result, full-time employment – which, I think we can all agree, is the best kind of employment – actually showed impressive strength: Up 33,500 from May. What dragged the total into negative territory was a 43,000-job drop in part-time positions.

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Nick Rowe, an economist at Carleton University, makes a quick and effective calculation to gauge the strength of any jobs report. He takes the part-time jobs (gained or lost) and divides them by two – since these are, after all, part-time jobs. He adds the result to the full-time jobs gained or lost. By this measure, Canada didn't lose 9,400 jobs in June, it gained 12,000 full-time-equivalent jobs.

By Prof. Rowe's own admission, this is a simplistic back-of-the-envelope calculation, yet it's a decent reflection of reality. Statscan data show that the average part-timer typically works about 19 hours a week; the average for full-timers is about 40 hours a week. So, if you want to split hairs, treating a part-time job as one-half of a full-time job is actually a little generous to the part-time category.

If we look beyond the June numbers at the broader labour-market trend, we see a similar picture: The perceived sluggishness in Canada's job creation this year is largely a part-time phenomenon, masking an improvement in full-time employment.

Over all, the Canadian economy created 53,000 jobs in the first six months of 2014 – putting it on about the same average monthly pace as it achieved in 2013, which was generally considered a lousy year for Canadian employment. But all the growth to date in 2014 has been in full-time jobs – indeed, the count of full-timers is up 56,000, while part-time positions have declined slightly. Compare that to 2013, when full-time jobs grew just 5,000 the whole year, while part-time jobs grew 94,000. If you do Prof. Rowe's quick calculation, full-time-equivalent employment growth this year is running at about double last year's pace.

All of this raises obvious questions about why we routinely talk only about the number of jobs created in a given month or year, without distinguishing between full-time and part-time work. Intuitively, full-time employment holds more value, both in terms of economic growth and, maybe even more importantly, to the bulk of Canadian workers. Statscan data show that more than one million part-time workers, nearly one-third of the total, would rather be working full-time.

These so-called involuntary part-timers have some cause for optimism in the improving full-time employment trend – as, indeed, do economy watchers in general. The pure quantity of Canadian jobs may not be that impressive, but the breakdown between full- and part-time suggests the quality of the job market may have turned a corner.

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About the Author
Economics Reporter

David Parkinson has been covering business and financial markets since 1990, and has been with The Globe and Mail since 2000. A Calgary native, he received a Southam Fellowship from the University of Toronto in 1999-2000, studying international political economics. More

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