Part-time work on the rise

But it’s not the new normal, says TD study
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 10/06/2014

Part-time employment has been on the rise in Canada. Over the past year, it has easily outpaced full-time growth, according to a TD Economics report citing Statistics Canada numbers.

After increasing in the late 1970s and 1980s, part-time employment was relatively flat until the 2008-09 recession, when full-time work was harder hit. As the economy improved, the part-time share fell back but, more recently, part-time has seen another surge — of the 95,000 job gains since December 2013, about 60 per cent or 57,000 have been part-time.

"Mid-2012 to mid-2013, we saw a fair bit of full-time job creation but, at the same time, economic growth during that period was pretty modest," said Randall Bartlett, senior economist at TD Economics in Toronto and co-author of the report.

"Now, we see the opposite happening, where we’ve got economic growth in the last quarter of 3.1 per cent but we’re actually seeing a larger part-time job creation in the second quarter of the year and over the last year as whole."

The job market is still struggling to gain traction and the labour market "has become increasingly tilted toward part-time employment," according to TD’s Part-Time Nation: Is Canada Becoming a Nation of Part-Time Employed?

But this looks like an indication of a weak labour market, rather than some kind of shift from employers, said Angella MacEwen, senior economist at the Canadian Labour Congress in Ottawa.

"People are getting part-time hours because the work just isn’t there," she said. "There were some more full-time jobs that were created in the initial recovery from the recession, but now we’re seeing a part-time surge again and that seems to be just part of business confidence... and a lot of that is involuntary part-time."

The relationship between full-and part-time work is complex and Statistics Canada uses a bit of an arbitrary definition, according to Ted Mallett, vice-president and chief economist at the Canadian Federation of Independent Business in Toronto. Working fewer than 30 hours per week is considered part-time, so if an hourly worker drops from 32 hours to 28 hours, she’s officially become part-time.

"Even with a fairly small movement in the number of hours, they’ve category-jumped in that respect, and I think we’re probably seeing a lot of that — both on the upside and downside — over the years, with the business cycle the way it moves," he said.

"Given that we’ve had a bit of slowdown in the late part of 2013 and then early 2014, it had this kind of effect — a chill on the labour market in general."

Canada is not becoming a nation of part-timers, said Bartlett, but there are underlying factors that could see part-time work increase somewhat.

What’s behind the numbers?

Since 1997, women have consistently made up about 70 per cent of part-time employment, said the TD report. And the gap between the participation rates of prime-aged men and women (aged 25 to 54) continues to shrink, so as women make up the bulk of part-time employed, the part-time share of employment could continue to rise over the longer run.

"With each year… women are just more and more likely to be attached to the workforce," said Bartlett. "And as women in those age groups are getting older, they’ll be more attached to the workforce when they’re 70 than a 70-year-old is today."

Ultimately, we’ll see a gradual convergence to the average in terms of what industries women and men are working in, said Mallett, "and who is responsible for childcare and so on, so the differences will probably moderate."

In addition, Canadians aged 65 and older represent about eight per cent of the part-time employed — roughly double their share one decade ago. The participation rates of workers 55 and older have also risen steadily, from 23.6 per cent in the 1990s to 37.5 per cent today, said the report.

"If older workers are working more and increasing their share of part-time work, this represents the biggest reason yet why part-time employment may continue to become more prominent going forward."

That could be good or bad, said MacEwen.

"That might be people who are easing into retirement and who want to do this and this is supplementing maybe some pension income that they have, but it could also be people who are forced to return to work after having been retired or who want more hours but can’t get it."

While there has been a rise in involuntary part-time employment in recent years — from 650,000 before the recession to about one million — that’s since stabilized, suggesting more Canadians are choosing to work part-time for other reasons, said TD, with many citing "going to school" and "personal preference."

A lot of it is structural as well because the pace of business has shifted, said Mallett.

"You can’t have solely a full-time economy in cases where businesses now run, many of them, on a 24-hour, seven-day-a-week basis, so part-time is always required to fill in those particular gaps."

Future prospects

Overall, TD is predicting both stronger job gains and a more equitable distribution between full- and part-time positions in the coming months as the economy picks up steam. And full-time jobs still make up four-fifths of total employment.

"That said, the narrowing gap between the male and female participation rates, as well as the shift to an aging population in Canada, may work to increase the prominence of part-time hiring in the labour market in the future, thereby warranting continued observation," said the report.

Employers are going to adapt to meet the circumstances that best suit them in terms of profitability and long-term planning, as well as attracting employees, said Bartlett.

"That dynamic may change over time, so I don’t know if there’s an ideal ratio (between full-time and part-time)… but I would think it really comes down to the reason people are working part-time versus full-time," he said. "It’s not necessarily a negative outcome for the economy if it’s meeting people’s preferences."