Layoffs more likely in late 1970s than mid-2000s

Also greater earnings losses for workers: StatsCan
|hrreporter.com|Last Updated: 12/16/2011

Canadian workers aged 25 to 54 were less likely to lose their job during the mid-2000s than they were in the late 1970s, according to Statistics Canada.

Between 1978 and 1980, 8.3 per cent of the jobs held by workers aged 25 to 54 ended with a permanent layoff, compared with 6.1 per cent between 2005 and 2007. (A permanent layoff occurs when an employee does not return to her employer in the year of the layoff or the following year.)

Falling layoff rates were observed in manufacturing and outside manufacturing. For instance, permanent layoff rates in manufacturing averaged 6.6 per cent during the late 1970s and 5.4 per cent during the mid-2000s.

In addition, those who were laid off from a job in industries other than manufacturing experienced smaller short-term earnings losses from 2005 to 2007 than their counterparts did in the late 1970s.

However, men aged 25 to 54 who were laid off in manufacturing from 2005 to 2007 experienced larger short-term earnings losses than their counterparts did in the late 1970s, according to the study How Have the Risk of Layoff and Earnings Losses of Laid-off Workers Evolved since the Late 1970s in Canada?

In industries other than manufacturing, laid-off workers experienced smaller short-term earnings losses from 2005 to 2007 than in the late 1970s.

In the late 1970s, men who were laid off from industries other than manufacturing received 12 per cent lower earnings one year after being displaced compared with the year preceding displacement. From 2005 to 2007, men who were laid off had lost four per cent of their pre-displacement earnings one year later.

For women, earnings fell 29 per cent in the year after displacement in the late 1970s, found StatsCan. For those laid off between 2005 and 2007, however, earnings had declined 11 per cent one year later.

Different patterns were observed in the manufacturing sector, especially for men. During the late 1970s, men who were laid off from manufacturing jobs lost 12 per cent of their pre-displacement earnings. However, men who were laid off between 2005 and 2007 lost 18 per cent of their pre-displacement earnings. Earnings losses of their female counterparts were little changed.

Earnings losses of displaced manufacturing workers increased substantially between the late 1990s and mid-2000s.

For instance, from 1998 to 2000, earnings for women who were laid off declined 17 per cent in the year following displacement. From 2005 to 2007, their earnings fell 35 per cent in the following year. The corresponding numbers for men are seven per cent and 18 per cent. This increase in earnings losses coincided with the sharp decline in employment observed in manufacturing since 2004.

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