Media Releases

Precarious employment on the rise says new working paper from the Institute for Competitiveness and Prosperity

October 4, 2013

A rising number of workers in Toronto are employed in temporary, part-time, low-paying positions in routine-service industries, but there is a way forward

Toron­to ON – Ontario’s econ­o­my, and its tra­di­tion­al eco­nom­ic strong­hold in the Toron­to region, are slow­ly return­ing to pre-reces­sion­ary lev­els of employ­ment. Yet there has been grow­ing con­cern about the kinds of jobs the econ­o­my is cre­at­ing. The grow­ing preva­lence of “pre­car­i­ous employ­ment” – jobs that are tem­po­rary, part-time, with few ben­e­fits and low wages – has been wide­ly dis­cussed in the media in recent months.

In Untapped poten­tial: Cre­at­ing a bet­ter future for ser­vice work­ers, the Insti­tute for Com­pet­i­tive­ness & Pros­per­i­ty part­ners with the Mar­tin Pros­per­i­ty Insti­tute to exam­ine job trends with­in Toronto’s largest employ­ment sec­tor: rou­tine-ser­vice jobs. These occu­pa­tions, includ­ing retail staff, food ser­vice work­ers, clean­ers, taxi dri­vers, sec­re­taries, and oth­ers, account for 45 per­cent of Toronto’s work­force and have the worst employ­ment con­di­tions of all occu­pa­tions. What emerges is a clear­er pic­ture of who is being affect­ed, and pol­i­cy rec­om­men­da­tions that can help.

Toronto’s rou­tine-ser­vice work­ers are most­ly women, youths, and immi­grants. They are also more edu­cat­ed on aver­age than rou­tine-ser­vice work­ers in any oth­er Cana­di­an Cen­sus Met­ro­pol­i­tan Area, and increas­ing­ly so. The pro­por­tion of rou­tine-ser­vice work­ers in the Toron­to region with bachelor’s degrees increased from 13.3 per­cent in 2001 to 20.2 per­cent in 2012, while the pro­por­tion of grad­u­ate degree hold­ers rough­ly dou­bled over the same peri­od. The Insti­tutes see this as an oppor­tu­ni­ty to make bet­ter use of work­ers’ skills and in turn boost their pro­duc­tiv­i­ty. If rou­tine-ser­vice work­ers can add more val­ue to their jobs, employ­ers will have greater incen­tive to pay them more and give them per­ma­nent, full-time sta­tus. Fail­ure to tack­le this issue in a seri­ous way will result in a lost gen­er­a­tion and a lost oppor­tu­ni­ty.

For this to hap­pen, employ­ers and pol­i­cy­mak­ers need to place more empha­sis on work-based train­ing and edu­ca­tion. Rou­tine-ser­vice work­ers with post-sec­ondary cer­tifi­cates and diplo­mas earn high­er wages than those with­out them and are the most like­ly to be in per­ma­nent, full-time employ­ment. More rou­tine-ser­vice jobs should require a basic lev­el of train­ing through cer­ti­fi­ca­tion and licens­ing. Voca­tion­al edu­ca­tion through the col­lege sec­tor should be expand­ed to ensure more rou­tine-ser­vice work­ers can acquire the right prepa­ra­tion to match the jobs that will offer career devel­op­ment.

Busi­ness­es must also do their part to invest in their work­ers and increase the cre­ativ­i­ty con­tent of rou­tine-ser­vice jobs. Keep­ing work­ers dis­en­gaged and unpro­duc­tive is bad for a business’s bot­tom line and bad for work­ers’ career and skills devel­op­ment. Encour­ag­ing work­ers to make pro­duc­tive improve­ments to their work­place and reward­ing them for this through bet­ter work terms, ben­e­fits, and high­er wages will help employ­ees, busi­ness­es, and the econ­o­my as a whole.

The Insti­tutes call on pol­i­cy­mak­ers and busi­ness­es alike to rec­og­nize the “untapped poten­tial” of rou­tine-ser­vice work­ers. Toron­to, and Ontario’s, pros­per­i­ty can be enhanced by focus­ing on improv­ing pro­duc­tiv­i­ty and work­ing con­di­tions in the largest com­po­nent of the work­force. Rou­tine-ser­vice work­ers need to be bet­ter-matched to their jobs and cre­ate more val­ue with­in them. Accom­plish­ing this will boost liv­ing stan­dards for mil­lions of work­ers across the province.

“This is not a zero-sum game,” said Roger Mar­tin, Chair of the Task Force on Com­pet­i­tive­ness, Pro­duc­tiv­i­ty, and Eco­nom­ic Progress and Aca­d­e­m­ic Chair of the Mar­tin Pros­per­i­ty Insti­tute. “The way for­ward is not just to pay more for pre­car­i­ous work but also to upgrade and enhance the cre­ativ­i­ty con­tent of these jobs. Ontario can become a leader in set­ting the new stan­dard for rou­tine-ser­vice work by real­iz­ing the poten­tial of these work­ers and pro­vid­ing them with oppor­tu­ni­ties for bet­ter career devel­op­ment.”

The Prob­lem

• The num­ber of pre­car­i­ous­ly employed rou­tine-ser­vice work­ers – those employed in part-time and/or tem­po­rary posi­tions earn­ing at or below the Low Income Cut-Off – in the Toron­to region is increas­ing at a high­er rate than the num­ber in non-pre­car­i­ous employ­ment.
• Rou­tine-ser­vice work­ers are less like­ly to have access to employ­er-pro­vid­ed ben­e­fits, less like­ly to work a reg­u­lar 9‑to‑5 sched­ule, and more like­ly to hold mul­ti­ple jobs.
• Women, youth, and immi­grants form the major­i­ty of these pre­car­i­ous­ly employed work­ers.

Cause of the Prob­lem

• The nature of ser­vice work is low skill, lead­ing to rou­tine-ori­ent­ed jobs with low wages.
• The labour mar­ket has seen a shift away from per­ma­nent, full-time employ­ment toward more tem­po­rary, con­tract, and part-time arrange­ments. This is influ­enced by hyper-com­pe­ti­tion and the need for flex­i­bil­i­ty amid eco­nom­ic uncer­tain­ty.
• Per­son­al char­ac­ter­is­tics can lead some work­ers to choose or be forced into pre­car­i­ous employ­ment. For exam­ple, moth­ers with young chil­dren are more like­ly to seek jobs that offer irreg­u­lar, flex­i­ble sched­ules. Youth and immi­grants who lack rel­e­vant work expe­ri­ence may only be qual­i­fied for ser­vice jobs.

Our Rec­om­men­da­tions

• Find new ways of enhanc­ing the cre­ativ­i­ty con­tent of ser­vice jobs through increased cer­ti­fi­ca­tion, bet­ter train­ing, and job designs that require more cre­ative input from work­ers.
• Increase voca­tion­al edu­ca­tion to help cre­ate a ded­i­cat­ed and pro­fes­sion­al­ized rou­tine-ser­vice work­force.
• Cre­ate tax cred­its for voca­tion­al train­ing pro­grams under­tak­en by busi­ness­es sim­i­lar to appren­tice­ship tax incen­tives.
• Help youth and immi­grants bet­ter inte­grate into the labour mar­ket and have their skills rec­og­nized.
• Pri­or­i­tize long-term invest­ments in work­er reten­tion and view employ­ees as assets. Increase cre­ativ­i­ty con­tent of jobs. Invest in and reward employ­ee skill and pro­duc­tiv­i­ty enhance­ments.
• Extend pub­licly-fund­ed ben­e­fits to work­ers.

About the Insti­tute

The Insti­tute for Com­pet­i­tive­ness & Pros­per­i­ty is an inde­pen­dent not-for-prof­it orga­ni­za­tion estab­lished in 2001 to serve as the research arm of Ontario’s Task Force on Com­pet­i­tive­ness, Pro­duc­tiv­i­ty and Eco­nom­ic Progress. The Insti­tute is sup­port­ed by the Ontario Min­istry of Eco­nom­ic Devel­op­ment and Inno­va­tion. Work­ing Papers pub­lished by the Insti­tute are pri­mar­i­ly intend­ed to inform the work of the Task Force. In addi­tion, they are designed to raise pub­lic aware­ness and stim­u­late debate on a range of issues relat­ed to com­pet­i­tive­ness and pros­per­i­ty.

The com­plete report can be down­loaded direct­ly from: http://www.competeprosper.ca/work/working_papers/working_paper_17.

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For more infor­ma­tion, con­tact:

Jami­son Steeve
Exec­u­tive Direc­tor
Insti­tute for Com­pet­i­tive­ness & Pros­per­i­ty
Mar­tin Pros­per­i­ty Insti­tute
Tel: 416–946-7585

Ken McGuf­fin
Man­ag­er, Media Rela­tions
Rot­man School of Man­age­ment
Uni­ver­si­ty of Toron­to
Voice 416–46-3818
E‑mail mcguffin@rotman.utoronto.ca
Fol­low Rot­man on Twit­ter @rotmanschool
Watch Rot­man on You Tube: www.youtube.com/rotmanschool