What the U.S. Can Learn From Canada's High-Paying Jobs Recovery
As a resident of Toronto (hold the Rob Ford jokes), I often say there are many things the United States can learn from its northern neighbor. Thanks to its stable regulated banking and mortgage systems, Canada was able to sidestep many of the worst aspects of the 2008 economic and financial crisis. The country's sensible approach on gun control has made its cities, including Toronto, among the safest in the world (Doug Sanders of the Globe and Mail recently proposed that the country become an "urban safety" exporter). Its health-care system delivers better outcomes at a fraction of the costs. I could go on.
Another, less-talked about area where America has something to learn from Canada is employment. In the U.S., nearly one in five jobs (17.6 percent) generated over the course of the recovery have been low-wage temp jobs — a troubling trend I wrote about this past summer. But just over the border in Canada, temp positions made up less than 3 percent (2.7 percent) of the net jobs added to the economy between 2009 and 2013, according to a detailed analysis from my frequent collaborators at the economic modeling firm EMSI.
In fact, Canada has been adding good jobs at a clip that Americans could only hope for. More than a third of all new jobs created in Canada since 2009 pay over $30 dollars an hour.
Even more interesting, EMSI charted trends in job creation across Canada's biggest cities and metros. The chart below, from EMSI's recent analysis, shows the percentage of job change due to temp jobs — defined as those in the "employment services" sector — since 2009 in seven leading Canadian metros.
In Toronto, where I live, temp jobs made up just 3 percent of all jobs added since the economy recovery. In Edmonton, the metro where temp jobs made up the largest share of job growth, the figure was 9 percent. In two metros — Calgary and Regina — the net contribution of temp jobs to overall employment growth was negative, even as employment grew substantially. Not a single one of these large Canadian metros even got within swinging distance of the U.S. average.
The second chart, also from EMSI's analysis, looks at the geography of good jobs. It compares the growth of high-paying jobs to overall job growth. High-wage job growth outpaced the overall rate of job growth in six of the ten metros studied. In Toronto, high-wage jobs grew at roughly double the pace of overall job growth, 9 percent versus 4.3 percent. Growth in high-paying jobs far outpaced overall job growth in Calgary, Hamilton, Montreal and Regina as well.
The third chart traces the share of jobs paying more than $30 per hour. In Toronto, Regina, and Hamilton, more than half of the net new positions created since 2009 paid more than $30 an hour. In three other metros — Calgary, Ottawa and Vancouver — these good jobs made up between 30 and 43 percent of new jobs created. In two more, Montreal and Edmonton, high-paying jobs made up roughly one in four new jobs.
The table below compares the share of job change due to high-paying jobs versus temp jobs. The figures are staggering. In every metro the ratio of the share of job change generated by good jobs versus temporary jobs is greater than two to one.
|Job Growth in Canadian Cities|
|City||Percent Change Due to Temp Jobs||Percent Change Due to Jobs Paying Over $30/hour|
In Toronto, 55 percent of job change was due to good jobs, while just 3 percent was due to temp jobs. In Vancouver, good jobs made up 31 percent of job change, compared to 7 percent for temp jobs. In Montreal, good jobs accounted for 26 percent of job change versus 4 percent for temp jobs.
The pattern stands in striking contrast to the United States, where new low paying, temp jobs far outnumber high-paying jobs. As EMSI bluntly and rightly put it, "Canadian cities aren't just adding jobs. They're adding careers." When it comes to making good jobs, there's a lot America can learn from our northern neighbor.
Top photo of the Toronto skyline is courtesy of Flickr user ilkerender.