Economist warns job market not as robust as reported
Economist Don Drummond delivers his report at a news conference in Toronto on Wednesday February 15 2012. (Chris Young / THE CANADIAN PRESS)
Published Friday, July 13, 2012 1:20PM EDT
While the Bank of Canada is reporting that businesses are optimistic about their hiring prospects, one economist remains weary of future job creation in the country.
In an interview with CTV News Channel, Queen’s University economist Don Drummond said newly created, well-paying jobs tend to be in highly focused fields.
“They require extensive and fairly specialized education,” said Drummond, adding that a number of new jobs in Canada are also being created in the lower end of the income spectrum.
“What there’s not enough of is jobs in the well-paying middle to upper-middle income. Particularly in that more traditional manufacturing base,” he said.
Drummond pointed out that Canada’s manufacturing sector saw an increase in output last year, which was achieved without increasing job numbers.
“In fact many of them (manufacturing firms) continue to lay off people and we’re seeing some wage compression.”
A quarterly survey released by the Bank of Canada this week shows 59 per cent of Canadian firms plan to hire. The survey also shows that 32 per cent of businesses expect sales to slow while 47 per cent expect to see higher sales than in 2011.
A CIBC report on employment quality released Thursday showed 155,000 new jobs were created in the first half of 2012 -- more than economists were expecting. The report showed that most jobs were full-time and in high-paying positions, however it also cautioned that job creation for the second half of the year is expected to decrease.
Drummond pointed out that new jobs tend to be concentrated in certain parts of the country and in limited sectors.
“It’s great news if you can live there or if you’re already living in those areas and have some specialized training, but it doesn’t necessarily mean that all the boats are going to be lifted simultaneously.”
Drummond said while there’s an abundance of employment in the construction sector and certain areas of engineering, that’s not the case for most job fields.
He pointed out that for every one job in education in Canada there are 10 job-seekers.
“You can’t really brand the entire job market from coast to coast to coast and by all sectors with the same kind of brush,” he said.