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JDI Roundtable on Manufacturing Competitiveness in New Brunswick

Our jobs recovery is built on teenage labour

Herb Emery

The June labour force statistics had some good news for New Brunswick. Employment in the province has recovered to close to the levels seen in June 2019, even as the rest of Canada remains at around 90 per cent of their employment levels from one year ago. But these aggregate changes mask some important differences in whose employment has recovered and who is working more since the economy started to re-open.

The Huffington Post has reported, based on a Bank of Montreal study, that Moncton is now the number one place in Canada for jobs. It is faint praise for the city and province, however, as the report highlights that Atlantic Canada wasn’t hit as hard by the virus as the rest of the country, had less restrictive lockdowns and had an earlier return to business.

Moncton stands out among the 33 Canadian cities evaluated in the BMO study because employment is only 2.7 per cent below what it was in June 2019.

Most cities, including Saint John and Halifax, remain over 10 per cent below June 2019 levels.

The explanation provided by Huffington Post is that Moncton and New Brunswick’s high rankings reflect the benefits of “being left on the margins of a global economy,” having industries such as food processing and fishing that were deemed essential and kept operating and having a lack of “frivolous” businesses “catering to the rich.”

Big cities in Canada, particularly those with businesses catering to high income earners such Vancouver, Calgary, Toronto and Montreal, are slumping worse than smaller cities. It sounds like our “comrades” in Moncton have established a socialist haven in the Maritimes that is to be envied by the rest of Canada.

The Huffington Post’s report shows a lack of understanding of the Maritime economy, which is highly exposed to global competition, rather than on the margins of the global economy as the report claimed. What’s more, the report omitted other big Moncton employment drivers like transportation, warehousing and government.

If the Huffington Post interpretation of Moncton and the province’s employment recovery is correct, then we need to ask why the recovery is not as apparent in Saint John, where employment in June 2020 is 13.3 per cent below June 2019.

Or, maybe the Huffington Post is right. Saint John displays the ravages of globalization on a capitalist industrial economy while Moncton, which continues to grow its population and maintain its employment, shows the power of a socialist minded business community and a higher dependence on federal and provincial government spending for employment.

It turns out that the recovery of employment in New Brunswick, and likely Moncton, has some interesting demographic dimensions to it that may leave us a bit more guarded in our celebrations of economic recovery and Moncton’s socialism.

We have a lot of kids working full-time and a lot of young adults working only part-time. I don’t think this supports a socialist utopian interpretation of the Moncton miracle.

First, employment for prime age workers, those 25 to 54, has recovered throughout the country.

For Canada overall, employment for 25 to 54-year-olds in June 2020 is around 95 per cent of June 2019 levels.

The recovery of employment is the same for full time and part-time work. For this age group in New Brunswick, full time employment is 96 per cent of June 2019 full time employment but part-time employment is 112 per cent of its level in June 2019.

So for these prime age workers the stronger recovery in New Brunswick compared to Canada appears to be from greater part-time employment, which could be consistent with an earlier re-opening of services with restricted operations like restaurants and hair salons. But for this age group, part-time employment is only 10 per cent of the number of persons employed full-time.

Younger workers in Canada have borne the brunt of the COVID lockdown, and their employment level in June 2020 is only 80 per cent of the June 2019 levels. For 20 to 24-year-olds, lower employment is seen for both full-time work and especially part-time work.

One surprising part of the employment recovery since one year ago is for 15 to 19-year-olds. In Canada, this age group has seen the same proportionate reduction in employment since a year ago as the 20 to 24-year-olds, but 15 to 19-year-olds are much more likely to be working full time than part-time.

It may be the case that in shutting down schools three months early, the youngest workers became available for full time hours at least a month earlier, crowding out 20 to 24 year old workers or taking the jobs that they would not.

The remarkable jobs recovery for New Brunswick is for 15 to 19-year-olds: Their June 2020 employment rate is the same as it was in June 2019. There are 1,900 fewer 15 to 19-year-olds working part-time in June 2020 than in June 2019 because there are 1,900 more 15 to 19 years working full-time hours!

You can start to understand how the prime minister stepped into the WE Charity mess aimed at cutting cheques to younger Canadians, particularly those who are of a post-secondary age. They have borne the brunt of the COVID19 downturn, and they are either unwilling to take the jobs on offer to the 15 to 19-year-olds or they are not competitive with high school students. A federal cash benefit for volunteering would at least have them able to contribute something to the community if they are not eligible for the Canada Emergency Response Benefit – another benefit that 15 to 19-year-olds are not eligible for.

Significant attention has been paid to the gendered dimensions of employment during the pandemic. In New Brunswick, men aged 20 to 24 have seen full time employment recover as much as for men aged 25 to 54. Females aged 20 to 24, in contrast, have full time employment numbers that remain below 80 per cent of June 2019 levels.

This is comparable to the rest of Canada, but much lower than the rate of employment for men in the same age group.

Like their male peers, females aged 20 to 24 have seen large increases in part-time employment, to nearly 60 per cent more than in June 2019. In contrast, males and females aged 15 to 19 have not seen much recovery in part-time employment numbers, again because so many more of them are working full-time.

New Brunswick’s employment recovery is a product of a lower representation of young workers in our overall workforce, given our aging population, significant growth in the part-time employment of 20 to 24-year-olds and a surprisingly large increase in full time hours worked by 15 to 19-year-olds.

New Brunswick’s relative employment advantage when compared to the rest of Canada appears to be the result of putting the kids to work. Contrary to what the Huffington Post argued, it is not a result of any particular advantage that comes with being a smaller city which has failed to tap into globalization.

Who knows, though? The central Canadian media’s move to create a reputation for Moncton as a socialist utopia – one that keeps the high income earners away – just might work.

Herb Emery is a Brunswick News columnist and the Vaughan Chair in Regional Economics at the University of New Brunswick.

This article first appeared in Brunswick News publications – July 15, 2020

The JDI Roundtable on Manufacturing Competitiveness in New Brunswick is an independent research program made possible through the generosity of J.D. Irving, Ltd. The funding supports arms-length research conducted at UNB.