Your job is as safe as it has ever been. Probably safer.

There is a certain sentiment—possibly driven by nostalgia—that jobs used to be more stable

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Chris Sorenson’s recent cover story for Maclean’s—“How safe is your job?”—strikes a nerve: it’s easy to get the impression that the job market ‘feels’ weaker than it really is. After all, job market stories follow the same pattern every month: 29 days in a row of reports of firm after firm laying off hundreds of workers. The once-a-month Labour Force Survey release never seems to have the same sort of impact, even if—as has been the case over the past 4 years—employment increases by some 20,000 workers in an average month.

This isn’t to say that those stories are wrong, or even misleading. If anything, they understate the scale of the flow of job losses: more than 100,000 Canadians lose their jobs in a given month. But that’s just it: large numbers of job losses are standard fare for the Canadian job market, and they always have been. So are large inflows of new jobs. The net changes in employment are the tip of the iceberg: the gross flows in and out of employment are at least ten times as large.

There is a certain sentiment —possibly driven by nostalgia—that jobs used to be more stable than they are now. This sentiment turns out to be inconsistent with the data. In a recent study published in the Canadian Journal of Economics, the University of Ottawa’s Pierre Brochu looked at historical trends in job stability. Here is an extract:

It is widely acknowledged that technological change, combined with an increase in international trade, has had a significant impact on the economy. The ‘New Economy’ literature has emphasized how these forces have altered the employer-employee relationship, resulting in a breakdown of traditional job arrangements and a rise in non-standard work such as temporary work and self-employment… A perception exists that, in this ‘New Economy,’ workers have become as disposal as any other resource – implying that job stability has declined. However, researchers who directly examined this issue found modest (if any) evidence of a long-term decline in job stability…

Using Canadian Labour Force Survey (LFS) data, Heisz (2005) concluded that there was no long-term drop in job stability. He did, however, find some evidence of increased stability in the mid- to late 1990s. By updating the Canadian evidence into the late 2000s, this paper clearly shows that the changes first observed by Heisz (2005) represent long-term changes in job stability, rather than temporary changes, as was previously believed…

[T]he increases in job stability first observed in the 1990s were long-lasting, not temporary as previously believed. I also show that the rise in job stability of low-tenure workers, which had started in the 1990s, continued into the 2000s. By 2007, the retention rate for workers with less than one year of tenure had exceeded 57% – a historical high. These findings do not match up with the ‘New Economy’ literature’s belief that workers are now disposable just like any other resource. In fact, this paper shows the opposite: the employer-employee relationship is now more stable than it was in the 1970s and 1980s.

It’s possible that things have changed since then. A proper update would require reconstructing Brochu’s measures of retention rates from the LFS main data files after 2010, but that would require data and time I don’t have. However, I do have the Public Use Microdata Files (PUMF) and from that I can extract a measure of layoff rates: respondents who are unemployed for less than one month and who report permanent layoff as the reason they are unemployed. Here is what they look like:

I don’t see a recent trend to higher layoff rates.

Incidentally, keeping these flows in mind helps understand why the unemployment rate increases so quickly during recessions and falls so slowly during expansions:

David Andolfatto explains this asymmetry this way:

The basic idea is very simple… [T]he labor market is a market for productive relationships. It takes time to build up relationship capital. It takes no time at all to destroy relationship capital. (It takes time to build a nice sandcastle, but an instant for some jerk to kick it down.)

We see the same sort of phenomenon in population dynamics–the so-called “heat wave effect.” That is, mortality rates spike up during a spell of bad weather, causing a sudden decline in the population. There is no corresponding spike up in the population during a spell of good weather for obvious reasons (unless you believe in zombies returning suddenly to life).

There is nothing paradoxical about the combination of a declining unemployment rate and large numbers of layoffs. That’s how the labour market functions.




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Your job is as safe as it has ever been. Probably safer.

  1. I wonder if the lower job stability in the 1970s and 1980s was due to the large numbers of young people entering the workforce at that time – the first wave of baby boomers.

    • The first boomers were born in 1946….so at 21 it would be 1967

      • And the last year of the boom was 1965, corresponding to 21 in 1986, so 1967-1986 corresponds roughly to 1970s and 1980s, allowing that 21 is an arbitrary definition of “young people”. Using a range of 18-30 would extend the dates to 1964-1995.

        • Play with the numbers all you want….the boomers first ‘wave’ hit in 1967,

          The youngest boomers are about to enter their 50s.

          • No argument. The article doesn’t specify exact years, just says the 70s and 80s. Obviously the workforce didn’t suddenly get massively younger in 1967, or massively older in 1986, but it’s reasonable to assume that between those years it was on average younger than in the decades preceeding or succeeding. Perhaps those demographics have some effect on the job stability numbers.

          • Boomers also had the benefit of the one-off from the war in that it was still going on…..and certainly lots of boomers left school for the factories at 16. I picked 21 because it was adulthood then….the age at which you could vote, drink etc It was also the age at which people graduated university.

          • Indeed – I’m an early boomer myself and jobs were easy to get in those days – and easy to lose too.

          • Yes, although boomers were convinced there was no room for them in the economy and they’d never get anywhere. Same as millennials believe today. LOL

          • Confirming Mike2′s comment, I guess – “life always feels uncertain because the future cannot be known”

          • Well personal futures can’t be known….but these days we can see ahead in more general terms. For example we’re going ahead to robotics and space, not back to log cabins and hunting.

          • I don’t like the analogy. Having good quality munitions and rifles to defend in a cottage somewhere will be a good thing if some solar ejectile mass wipes out electricity for 6 months.

            The big items of success, rationally and pragmatically think for your self, invest in yourself with needed skills for higher wages, learn to invest and not take some banker/governments word for it go a long way to reduce risk and get success. Whine and envy of others gets you nowhere fast.

          • Dave….the economic whacko.

          • While you can’t guarantee a future, personal development of rational attitude, personal responsibility and realistic planning removes a lot of risk with a nice upside tick.

            Invest in ones self with education, rational and pragmatic thought processes, learning how to invest savings and elimiate debt by getting skills that pay more…

            All lower risk and increase chances of prosperity. But so many choose self pity, envy, greed of other peoples money no one can win if they rule.

          • You must be young and naive, as it shows.

          • I do not agree with or support Dave’s economic rubbish.

          • I’ll agree with the naive, but she claims to be 67. Whether that counts as young probably depends on how old you are ;-)

          • But if you were a producer and productive you had it made. I went through a few layoffs, always survived. And when problem childs were fixed, lots of OT to save money for a house, and less taxing made savings for a house grow faster.

            It was better than today except for the inflation and high interest rates from Trudeau Srs. debt spend. Our parents had it better in 1946-1965 when taxes were low, government was shrinking and the economy was left to prosper without the parasitic nature of aggressive taxation.

          • As long as you didn’t get too far in debt and could afford the interest payments on the mortgage, the high rate of inflation quickly meant that – as long as you didn’t move – your mortgage costs shrank, as a portion of your income, pretty quickly. That in turn freed up income to do / buy other things. So if you played your cards right, high inflation could be (and often was) the friend of the homeowner.

          • Boomers were allowed to prosper as they had a lot less government. Post war government spending and taxation plummeting so the people ran out and bought homes and had kids.

            Net tax income for governemtn actually went up even though they taxed less as more economic activity in a housing and baby boom. Stuff cost less as the person who made cribs wasn’t loaded down with 50% taxes in income/employment/property/utility/gas taxes. Given cars were relatively cheap as was gas, people drove around employing others and Howard Johnsons prospered.

            As people had more of their own money and less went to non-valued added government waste. I still have my grandfathers 1951-1962 income taxes, he was a high wage earner and paid very little in tax. So he built a home, cottage employing others and had kids.

            Today between income/employment/property/utility/and a whole lot of hidden taxes on spending, governemtn benefits from our productive peoples existence more than the productive do. But it means a lower standard of living as governemtn wastes the wealth.

          • I do not agree with or support anything that whacko Dave says.

      • The boom occurred as inflation, taxes were low, and consumer economy was growing as productive people had more of their earned moneys to spend on stuff. Also raised the standard of living. Governemtn actually shrunk spending and taxed less post war creating a boom.

        People had more of their money to raise their kids, as opposed to today where we support too many government kids and debts forced on us.

        But no statism type will admit that less taxes, less government on the end of a major war caused a economic and baby boom as people could afford kids.

        Today, easier to milk and fleece people with taxes and import other people to cover for domestic baby production shortfalls. There is a reason single condos sell for more per sq/ft than family homes.

        • I do not agree with nor endorse Dave’s whacko economic views.

          • I’d think that someone who claims to be an economist might have some data to refute what he said. As opposed to just calling him “whacko”.

          • Hey…you two have met. Now you can both be whacko together.

    • Jobs existed for productive people but wages were repressed as there was not much competition in employment so lower wages resulted. It wasn’t a good time as hyperinfation was followed by high interest rates so if you were not on the ball with personal economics you could get screwed.

      It was the price of Trudeau Sr. debt, bad job environment, wages didn’t keep up with inflation followed by devaluing money and high interest rates.

      While recovery did occur, it wasn’t ever like it was before. The 60′s economy of good jobs, lower taxes, less debt, cheaper homes, low inflation and low rate debt without central bank ponzi fraud was gone for good.

  2. Great article. It is as refreshing as it is unusual to see someone actually take a look at the underlying data before making grand pronouncements on how “uncertain” the job market (or anything else, for that matter) is.
    Life always feels uncertain, because the immidiate future cannot be known. It was exactly the same 10, 20, 30, 40 years ago – however since we now all know how everything turned out, it doesn’t feel like things were so uncertain from today’s perspective. But at the time things were every bit as uncertain as they are now.

    • There was the one-off from the war….the world was trashed and only NA was available to make replacements or new things. Over time of course other countries recovered and started to make their own things…..but we had a post-war boom which lasted some time.

      • You know, when you try really hard, you can actually make sense sometimes. A shame you seldom put in the effort. Please do try to convince Ron Waller that the post-war boom was just that – a one-off result of WWII, with some helpful demographics thrown in, that lasted for perhaps 25 years. He’s convinced some catastrophic deregulation happened suddenly in 1970 or so that wiped out 25 years of growth.

        • I submit the post war reduction in governemtn and reduction in taxes made the boom. People had money and economical economy where they could afford homes, kids and cars without the debt fraud pump up.

          But they had less government.

          Another period to look at, 1987 to 1914, no income tax, o fiat fraud money from government, almost zero inflation in 57 years the largest percentage growth in Canadian history. People came in droves from economic and political repression of big governemtn in europe to embrace economic freedom and JOBS.

          May relatives came this way, no welfare, they went to work right away. Grandfather could afford 14 kids as he wasn’t spending much on government kids. Today we import them to social assistance as domestic people can’t afford as many kids.

          But again, they had LESS government taking less of their hard earned earnings. Thus had more money to spend to employ others doing productive stuff.

          • Quoting the Globe and Mail: “One can also note that the “tax burden” in 1961 was low because, back in those glorious days of small government, Canadians had no Medicare, no Canada Pension Plan, no Guaranteed Income Supplement to old age pensions, and only a tiny post-secondary educational system.”

          • Don’t assume that everyone supports all these programs or that everyone (net) benefits from them.

  3. I was under the impression that the difference now was that the jobs being terminated tended to be higher quality, with more benefits and generally full time, but the newer jobs being created tend to be lower quality and generally part time. As an example, yes, if I were laid off from my full time, public sector job, I could probably without too much difficulty get a part-time, minimum wage job at a liquor store. Once I achieved that, I’d fall out of the unemployed category in the statistics, but because it would neither replace the income, benefits nor long-term prospects of my current job, that wouldn’t constitute “security” for me. It would be a good follow up for this to repeat the analysis for full-time jobs only, if that’s possible.

    • Yup…..there are also the ‘underemployed’ which is what your situation would be, and there are people who have given up looking for work.

      If you take those stats into account the unemployment rate is more like 17%

      • That can’t be true Stephen, because it would contradict something that Emily said without doing any research, and she is never wrong. Just check out her responses!

      • Excuse me if i’m a little slow, but you haven’t addressed the question at all. If he loses his well paid PS job, what is the likelihood he will wind up in a less secure job but not be meaningfully measured as actually being worse off. This seems to me to be the heart of the Sorenson piece.

        • How can you have a less secure job than one that you just lost? In other words, any job has better job security than being unemployed.

          • Google precarious employment. The principle point here is that the job lost is most likely to be the better one, no?

          • The lost job doesn’t exist anymore though. You’re comparing apples to nothing.

          • Au contraire…you are using a fruit to make an non sequitur for some reason.

          • Depends. If you lose a job then look for one you will likely be paid a lot less.

            If you see your job is in peril, and leave before you get the pink slip you often get raises.

            My case is a case in point. I could see with NorTel’s CEO Stern the company was making bad moves in 1995 and it would kill my long term under paid future witht he company. So I looked for a job in the USA that ended up paying me twice as much with a lower rate of taxes and for 10 years I made of like bandit. Meanwhile in 1999-2002 my Nortel buddies that stayed didn’t do so well.

            As someone said, the first ones out the door do the best as the system isn’t flooded with skills getting lower wages. I was one of the first ones out.

          • True. Ill try to remember that when i fill out my application to THs or walmart.

        • You don’t see the forest for the trees. Some people experience an erosion in job quality. Some don’t. For example, there’d be the kid who leaves his job at the private liquor store because he’s completed engineering and starts working for Cisco’s new office in Waterloo. Real wages have been increasing, so that implies that on balance more good jobs are being created than destroyed. That’s small consolation to the 55-year old baby boomer who got laid off from a good paying job they’d held for 30 years and were hoping to stay in until retirement. That’s particularly true when their skills and experience have become obsolete and can no longer compete with somebody younger with lower wage expectations. This isn’t a particularly novel story, but for the fact that it’s impacting a disproportionately large generation at the moment. As the old saying goes, it’s a recession when your neighbour loses his job. It’s a depression when YOU lose your job.

          • What im saying is[ and i'm completely happy for you or SG to knock my bricks over] that that there are a lot of jobs out there of a precarious nature that mask the reality of our present historically low unemployment numbers.
            In what way are real wages increasing[ outside of select sectors like resource industries, and specialized skills] this at least partially appears to me to be another illusion masked by very low inflation brought about by our monetary policy.
            I’m getting way outside my competence here, but i’m not convinced that real wages are increasing across the board and therefor more full time jobs are being created then destroyed on balance. That certainly isn’t the impression i take away from the Sorenson piece.

          • outside of select sectors or specialized skills.

            What has changed is the level of skill or training to hold a good job. There were always lots of bad jobs, low skill low pay. There may be more now; people eat out more, people travel more so the service industries have more folks. But someone with a skill and good work habits is in demand.

            I’m seeing wage competition for the trades from Alberta, which is driving up the price here. The folks I buy from have trouble finding good people that will stick around long enough to become competent. I suspect they get hired away.

            What has changed is any capital intensive operation has automated away the low skill materials handling type work that used to employ lots of people at decent wages.

            And outside of the boom sectors, anyone with a habit or who doesn’t show up won’t have a job. There isn’t anywhere that will pay folks like that anymore.

          • All good points, but recent research into precarious employment shows that is growing. Used to only the low skill guys ‘n gals got left behind. Now its not uncommon for folks with skilled professions to be scrambling for contract work without any of the traditional benefits. The FWP is a sign of this.

      • True, gross wages are increasing but people don’t see the value as taxes, employee and employers parts actually reduce what the worker gets. Then again on spending, so many inflationary and hidden taxes and protectionism, the earned dollar doesn’t go very far.

        Its why plants close too. Canada is so tax inflated, people need obscene wages to live a basic life. 1/2 the cost of a home can be traced back to taxes of one type or another, pushes wage demands beyond reality. Thus plants like Heinz, facing 8.8% increase in dollars pent on raw items like sugar, tomatoes, with increased electric/utilities/property tax greed and costs, and militant unions wanting more….then their major customers went elsewhere…closing the plant.

        In the end, we make too much gross money but it all ends up in wasteful inefficient consumption government and we get less value. So in fact, our standard of living has decreased because we have too much government to support.

  4. “A better measure of job-market performance, Stanford argued, is the
    overall employment rate, which looks at how many working-age Canadians
    actually have jobs. That figure currently sits at 61.8 per cent, barely
    improved from the pit of the recession and below the level it was a
    decade ago. Without vigorous job growth that exceeds increases in the
    population, things aren’t going to get any better. “No wonder it still
    feels like a recession in the labour market,” Stanford notes. “By this
    key measure, we are hardly any better off than during the darkest days
    of the financial crisis.”

    This seems to me to be the kicker in Sorenson’s frankly, scary article. I don’t think on first read Mr G does a very good job of rebuttal. And whatever the stats may say i find your assertion[nostalgia...give me a break] that the jobs we hold now are as stable as those of the 60/70/and 80s to be a tad off to say the least eg[ a guy could snag a job on the green chain in just about any mill on the BC coast and expect to hold on to that job of most of his working life. Those days are long gone] Sure we don’t seem to get the large unemployment swings now we did back then during pre 2008 recessions, but there are underlying reasons. I can’t find a decent link to the rise of precarious employment, but they are out there.
    We could be headed for a perfect sh*t storm of cheap money,inability to get a return on the market for institutional investors, taped out consumers, bubble industries, and wobbly resource demand. Let’s hope the US saves us as they did in the 90s.

    • So in other words, despite all the evidence presented by Gordon, you’re just going to choose not to believe it. Good for you. Who needs those lousy statistics and evidence things to make decisions?

      • I’m just not convinced. Even you must know stats can lie or mask a deeper or hidden truth.

        • Especially when they hide how they create the stats like StatsCan and real inflation lies.

      • And what about the evidence presented by Sorenson? Are you just going to choose not to believe it?
        I think both authors make interesting points. I think reality is far too messy to sum up with either of their theories. On the balance, based on my reading of their articles and my own experience (which I admit is a pretty arbitrary way to measure this, but I don’t have the economic chops to bolster or refute either’s arguments) I’m leaning towards Sorenson’s viewpoint.

        • Sorenson simply presented anecdotal evidence, making mention of all the factories that were closing, and not mentioning any that were opening.

          He made bizarre statements like GDP growth “nearly ground to a halt” at 1.7%.

          He obviously had his conclusion set out before he wrote the article, and then found stories that would back up his theory.

          Gordon simply presents the numbers as they are, and they don’t present nearly as bleak a picture as you Liberals would like.

        • Not to mention that Sorenson is a journalist and Gordon is an economist. I know which one I’d go to for economic analysis.

        • Soreson didn’t present any evidence! It was just a bunch of lazy anecdotes.

      • Says the guy who supports the party that fuc*ed up the national census for good.

    • If you go to the resource industries the same thing applies. At one time guys like Stanford represented those folks, now they seem to go out of their way to make their jobs disappear.

      If Ontario is the subject, this is typical of a deficit driven government who can’t keep their fingers out of things. Those who place themselves in the money stream do well, everyone else has difficulty. Ontario is in many ways like the US economy; high fixed costs imposed by detached governments that makes it far more economical to do business elsewhere.

      • That’s one way of looking at it. I prefer to think there might be a sweet spot that doesn’t entail the sad spectacle of govt’s following each other in a race to the bottom. If they said no to economic blackmail more often we might all be a little happier and more economically secure.

  5. I’m Gen X. No one in my graduating class can say that they have a stable job. Virtually all have been laid off several times, no matter what field(s) they were in (mostly professionals). Many never made it out of the marginal part-time workforce. Job churn is massive, entire industries are created and die within a decade now. The ranks of freelancers (self-employed) have swelled, yet I bet their individual contracts do not show up as in this data as a series of unstable jobs, which they should.

    The same could not be said of our boomer or war generation parents. Certainly, some faced layoffs. But others had jobs for life, and overall they were nearly twice as likely to have a union job as someone is today.

    I find it hard to believe that Gordon can post this with a straight face. When your data seems so far out of whack with nearly everyone’s experience, do you question the experience, or take a closer look at the data and study methodology?

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