May 2020 Labour Market Update

The latest Statistics Canada local labour market report customized for the Brantford CMA for last month is now available.

May Unemployment Rate: Brantford 11.3% [+] Ontario 13.6% [+] Canada 13.7% [+]

Be sure to review the participation rate and the employment rate (reported as percentages), as well as the labour force, the employed, and the unemployed values (reported as absolute numbers). These give a better picture of changes in the market.

Labour Market Reports

The report includes annual rates for the last 10 years, comparing Brantford to surrounding CMAs as well as the provincial and national levels.

What follows is a summary from Statistics Canada.

Labour market responds as COVID-19 restrictions gradually ease

Employment rebounds and absences from work drop

From February to April, 5.5 million Canadian workers were affected by the COVID-19 economic shutdown. This included a drop in employment of 3.0 million and a COVID-19-related increase in absences from work of 2.5 million.

In May, employment rose by 290,000 (+1.8%), while the number of people who worked less than half their usual hours dropped by 292,000 (-8.6%). Combined, these changes in the labour market represented a recovery of 10.6% of the COVID-19-related employment losses and absences recorded in the previous two months.

Three-quarters of the employment gains from April to May were in full-time work (+219,000 or +1.6%). Compared with February, full-time employment was down 11.1% in May, while part-time work was down 27.6%.

Little change in the number of self-employed workers in May, but reduced hours continue

In May, the total number of self-employed workers held steady, following a decline of 79,000 (-2.7%) from February to April. For self-employed workers, the impact of the COVID-19 shutdown has been felt primarily through a significant loss of hours rather than a loss of employment. In May, 42.9% of self-employed workers worked less than half their usual hours for COVID-19-related reasons, a drop from 50.2% in April (not adjusted for seasonality).

Self-employed people who were away from work continued to be relatively harder hit financially than employees. Self-employed people who lost hours continued to be less likely to be paid than employees in the same situation. In May, among incorporated self-employed workers who worked zero hours for COVID-19-related reasons, less than 1 in 10 (7.8%) received pay (not adjusted for seasonality). This compared with less than 1 in 4 (23.1%) employees who worked zero hours (not adjusted for seasonality).

As some businesses re-open, more Canadians are working from a location other than home

The easing of COVID-19 restrictions and workplace adaptations have allowed some Canadians who are unable to work from home to begin returning to work, either at their previous workplaces or in new jobs. In May, 8.0 million Canadians who worked at least half of their usual hours worked at a location other than home, up from 7.2 million in April.

At the same time, the number of Canadians who worked at least half their usual hours and who worked from home was little changed at 4.9 million, as those who were able to work from home continued to do so.

In May, increases in both employment and hours worked were observed in a range of industries, including those where working from home is less practical due to occupation-related requirements to come into close physical contact with others, such as co-workers, clients and the public. This includes accommodation and food services, and wholesale and retail trade, the two industries where March and April employment losses were greatest.

Unemployment rate reaches record high as restrictions ease and more Canadians look for work

The unemployment rate was 13.7% in May, the highest rate recorded since comparable data became available in 1976. In February, prior to the COVID-19 economic shutdown, the unemployment rate was 5.6%. It increased to 7.8% in March and 13.0% in April.

From February to April, the total number of unemployed Canadians more than doubled. This COVID-19-related surge was driven by temporary layoffs, with the vast majority of the newly-unemployed expecting to return to their previous job within six months and not necessarily actively looking for another job. At the same time, large increases were recorded in the number of people who wanted to work but did not meet the definition of unemployed because they did not actively look for a job, presumably because of the restrictions and economic conditions associated with COVID-19.

In May, unemployment grew more slowly (+201,000; +8.3%) than in the previous two months and there was little change in the number of people on temporary layoff. Growth in unemployment was driven instead by an increase in job seekers, especially re-entrants to the labour force who had worked within the past year (not seasonally adjusted).

The May increase in the number of people looking for work was recorded among core-aged people (aged 25 to 54) and youth (aged 15 to 24), including students entering the summer labour market (not seasonally adjusted). This likely reflects a combination of factors, including young people starting to look for work as the COVID-19 economic shutdown evolves, and the requirements associated with temporary economic support measures for students, which include a requirement that applicants be actively looking for work.

The number of Canadians who wanted to work but did not look for a job remained high in May, falling from 1.5 million in April to 1.4 million. Of those within this group who might start looking for work in the coming months, the proportion of men (51.8%) and women (48.2%) was about the same. About 4 in 10 (38.9%) people in this group had a high school diploma or less (not seasonally adjusted). A similar proportion (42.3%) had a post-secondary certificate or diploma below a bachelor's degree.

Including the group who wanted to work but were not looking for work—without distinguishing how recently they last worked—would result in an adjusted unemployment rate of 19.6% in May, unchanged from April.

Summary: Labour force grows, but more than one-third of potential labour force remains underutilized

From March to April, the labour force—the total of all those who are either employed or unemployed—dropped by 1.7 million (-8.5%). In May, this trend reversed and the labour force increased by 491,000 (+2.6%), as employment began to rebound (+290,000; +1.8%) and unemployment increased (+201,000; +8.3%) as more Canadians looked for work.

The labour force participation rate—a measure of all those who are employed or unemployed as a proportion of the entire working-age population—increased 1.6 percentage points to 61.4% in May, but remained well below the pre-COVID-19 February rate of 65.5%.

While the labour force participation rate increased, a significant segment of the potential labour force remained underutilized in May. The "labour underutilization rate" combines those who were unemployed; those who were not in the labour force but who wanted a job and did not look for one; and those who were employed but worked less than half of their usual hours.

In May, more than one-third (34.8%) of the potential labour force was fully or partially underutilized, down slightly from 36.6% in April, but considerably higher than the 11.9% observed in February.

The underutilization rate was 51.8% for youth aged 15 to 24; 31.3% for people in the core working ages of 25 to 54; and 35.0% for people aged 55 and older.

Employment picture varies widely by sector and province

In the early days of restrictions being lifted, employment rebounds more strongly in goods-producing sector

Unlike previous economic downturns, the impact of the COVID-19 economic shutdown was felt first in the services-producing sector. Results from the March LFS, reflecting labour market conditions during the week of March 15 to March 21 showed widespread job losses in the services sector and minimal impact on the goods-producing sector. Results from the March Survey of Employment, Payrolls and Hours (SEPH) indicate that the impact had spread to goods-producing industries including construction and manufacturing by the last week of March. The April LFS also showed the spread into the goods-producing sector.

In May, employment rebounded more strongly in in the goods-producing sector (+5.0% or +165,000) than in the services-producing sector (+1.0% or +125,000).

Total hours worked increase at faster pace than employment

As COVID-19 restrictions are eased and economic activity increases, employers can be expected to respond, where possible, through a combination of increasing the hours of existing employees, bringing back employees from layoff, and adding new workers. In May, total hours worked across all industries grew by 6.3%, compared with an increase of 1.8% (+290,000) in employment. The May increase in hours worked followed a cumulative decline of 27.7% from February to April.

Total hours worked rose in most industries, led by construction (+19.0%); other services (+13.2%); wholesale and retail trade (+11.0%); manufacturing (+10.9%); educational services (+9.4%) and natural resources (+9.2%). In each of these industries, the growth in total hours worked was greater than the growth in employment.

The accommodation and food services industry experienced a greater drop in employment from February to April than any other industry. In May, the increase in total hours worked (+2.4%) was less than the growth in employment (+6.8%), possibly an indication that employers' initial adaptation to the easing of COVID-19 restrictions involved re-hiring former employees or finding new workers.

Overall, the average hours worked in Canada rose slightly to 29.5 hours in May, compared with 28.2 in April. The average hours worked still remains well below the average of 33.0 hours observed in February.

Wide variation in provincial labour markets reflect differences in easing of restrictions

Employment changes and labour market conditions varied widely by province in May, reflecting differences in the extent to which jurisdictions had eased COVID-19 restrictions as of the reference week of May 10 to May 16. To examine recent trends in provincial labour markets, visit the "Labour Force Survey in brief: Interactive app."

Quebec accounts for nearly 80% of overall employment gains in May

From April to May, employment in Quebec increased by 231,000 (+6.5%) and the proportion of workers who worked less than half their usual work hours for COVID-19-related reasons declined by 6.6 percentage points to 19.3%. The increase in employment was the largest gain among the provinces and represented a recovery of nearly 30% of the cumulative losses recorded in March and April.

The number of people who were on temporary layoff declined, pushing the unemployment rate in the province down by 3.3 percentage points to 13.7%.

The Quebec provincial government eased restrictions on business activity before the LFS reference week of May 10 to May 16, notably in construction from mid-April, and in retail trade and manufacturing outside Montréal from May 4.

The proportion of workers working from a location other than home increased from 60% in April to 65% in May. The largest employment increases in Quebec were in construction (+58,000), manufacturing (+56,000) and wholesale and retail trade (+54,000), three industries with a relatively high proportion of jobs that are difficult to do from home.

Employment increased by 97,000 (+5.3%) within the Montréal census metropolitan area.

Employment declines continue in Ontario, but at a slower pace

Ontario was the only province where employment continued to fall in May. This is consistent with the fact that most restrictions on economic activity remained in place in Ontario during the LFS reference week of May 10 to May 16.

While employment declined in Ontario in May (-65,000), it did so at a much slower pace than in March (-403,000) and April (-689,000). All of the employment decline in the province in May was in the services-producing sector (-80,000). At the same time, employment rose by 15,000 in the goods-producing sector, driven by manufacturing (+14,000).

The proportion of employed people in Ontario who worked less than half their usual hours declined from 22.1% in April to 21.2% in May.

In Ontario, 55% of workers worked from a location other than home in May, the lowest proportion of all provinces and little changed from April.

As most restrictions on economic activity remained in place in Ontario, the number of people who were not in the labour force but wanted to work and did not look for a job was little changed. The unemployment rate continued its upward trend, rising from 11.3% in April to 13.6% in May.

Employment picture is mixed, with some gains or little change in Western provinces

Employment in British Columbia increased by 43,000 in May and the unemployment rate rose 1.9 percentage points to 13.4%, as more people looked for work. Almost all of the employment increase in the province was in the services-producing sector (+41,000), led by accommodation and food services (+12,000), educational services (+12,000), and wholesale and retail trade (+12,000).

British Columbia announced a first phase of reopening on May 6, with a plan to lift restrictions on non-essential medical services and parts of the retail trade industry starting May 19, after the LFS reference week.

The number of employed people in Alberta grew by 28,000 in May, following a cumulative decline of 361,000 from February to April. The employment increase in the province was entirely driven by the services-producing sector (+33,000). The unemployment rate increased 2.1 percentage points to 15.5%.

Alberta allowed some businesses such as restaurants and non-essential shops to start operating from May 14.

In Manitoba, employment increased by 13,000 in May. At the same time, the proportion of employed Manitobans who worked less than half their usual hours fell by 1.7 percentage points to 12.9%. In May, most of the employment increase in Manitoba was in the services-producing sector (+12,000), the majority of which was in wholesale and retail trade (+7,000).

On May 4, Manitoba allowed a number of services businesses to resume their activities, with limited occupancy and physical distancing requirements.

There was little change in overall employment in Saskatchewan. Increases in wholesale and retail trade, manufacturing and accommodation and food services were offset by declines in many sectors, led by information, culture and recreation as well as in construction.

Employment increases in all Atlantic provinces

With the exception of Nova Scotia, provincial governments in the Atlantic provinces started to ease restrictions in early May, with New Brunswick reopening most of its economy from May 8. The number of employed people increased in New Brunswick (+17,000), Newfoundland and Labrador (+10,000), Nova Scotia (+8,600) and Prince Edward Island (+2,600).

COVID-19 continues to have unequal labour market impacts

Lower-wage jobs rebound the most with the initial easing of COVID-19 restrictions

In March and April, the federal government response to the COVID-19 global pandemic included the introduction of a number of temporary economic support measures. In addition to offering immediate financial support, these measures encouraged workers to adhere to public health physical distancing directives, either by working from home where possible or by stopping work.

Over March and April, the impact of the COVID-19 economic shutdown on employment was most immediate and severe on industries where working from home was less practical and on lower-wage workers. Employees who earned less than two-thirds of the 2019 annual median wage of $24.04/hour experienced a 38.1% drop in employment, compared with a decline of 12.7% for all other paid employees (not adjusted for seasonality).

As COVID-19 restrictions were eased in some parts of the country and overall employment rebounded by 1.8% in May, lower-wage jobs increased by 134,000 (+6.7%), a recovery of a little more than one-tenth of the losses experienced in March and April. The May increases were concentrated in wholesale and retail trade, and accommodation and food services (not adjusted for seasonality).

Employment increases among lower-wage workers were most notable in provinces where initial easing of COVID-19 restrictions had begun, including Prince Edward Island (+28.9%), New Brunswick (+21.8%), Manitoba (+17.0%) and Quebec (+14.5%).

Despite the increase in employment, low-wage workers continue to have a higher share of people working less than half of their usual hours for COVID-19-related reasons, compared with all other paid employees. In May, 24.3% of all low-wage workers worked less than 50% of their usual hours, compared with 9.6% for all other paid employees.

The rebound in lower-wage work in May was stronger among men (+10.7% or +93,000) than women (+3.6% or +41,000) (not adjusted for seasonality), meaning that one-fifth (20.5%) of the low-wage employment losses seen in March and April were recovered among men, compared with 5.2% among women.

Men see greater employment increases than women in May

The difference in the strength of the rebound for men and women in low-wage work was also seen for total employment.

Total employment increased more than twice as fast among men (+2.4% or +206,000) than women (+1.1% or +84,000) in May, resulting in a greater proportion of the employment losses experienced in March and April being recovered among men (14.0%) compared with women (5.4%). This is consistent with the more rapid increase in goods-producing industries, which account for a greater proportion of male employment (30.9%) than female employment (9.9%).

The quicker pace of employment growth among men in May can be seen across the three major age groups. The most notable difference was for those aged 55 and older, where employment increased by 4.2% (+85,000) among men, while it was little changed among women.

Among parents, women see less employment increase than men and are more likely to lose hours

Unadjusted for seasonality, employment increased by 2.0% (+21,000) in May among core-aged women with at least one child under age 6, compared with an increase of 4.2% (+62,000) for those whose youngest child was aged 6 to 17. Employment gains were higher for their male counterparts, with a 5.2% increase (+62,000) among men with at least one pre-school-aged child, and a similar increase (+5.2% or +72,000) for those whose youngest child was aged 6 to 17.

In May, 18.0% of core-aged women with children under 18 worked less than half their usual hours, compared with 14.3% of their male counterparts. While both of these shares remain much higher than what is typically seen, the fact that women are more likely to be absent from work than men is a long-standing trend that has not changed during the COVID-19 period.

As more COVID-19 restrictions are eased in the coming months, labour market outcomes of men and women with children will continue to be monitored.

Very challenging start to the summer job market for students

The labour market impacts of the COVID-19 economic shutdown have been especially severe for youth and students. Although employment among youth aged 15 to 24 increased by 30,000 (+1.8%) in May, this only slightly reduced the cumulative employment losses (-843,000; -33.0%) experienced by this age group from February to May.

Results from the May LFS suggest that returning students – those who were enrolled in March and intend to return in September – face particularly challenging labour market conditions. On a year-over-year basis, employment in this group was down 438,000 (-39.7%) in May. In comparison, employment among non-student youth was down 24.7%.

The unemployment rate in May was 40.3% for returning students (up from 13.8% in May 2019) and 25.1% for non-student youth (up from 9.8%). Among returning students aged 20 to 24—who were most likely to have completed their current year of studies by May—the unemployment rate surged from 10.8% in May 2019 to 42.1% in May 2020, the highest rate since comparable data became available in 1976.

A crowdsourcing data collection on the impacts of the COVID-19 pandemic, carried out by Statistics Canada from April 19 to May 1, indicated that post-secondary students were experiencing the cancellation of summer jobs and considerable uncertainty about the future. Over one-third of student participants who were enrolled in post-secondary education and had lined up a summer work placement reported that their placement had been delayed or cancelled as a result of COVID-19. One-half of post-secondary students reported being extremely concerned about paying for tuition, increasing their student debt or paying for current expenses.

Before the LFS interviewing period of May 17 to May 26, the federal government opened the application process for temporary financial supports targeted specifically at post-secondary students. Although the supplementary questions in the MayLFS did not mention these supports specifically, just over 3 in 10 (31.2%) youth reported having applied for the Canada Emergency Response Benefit (CERB) or regular Employment Insurance (EI) benefits since March 15, the highest rate across the three major age groups. The proportion of returning students who had applied for benefits was lower than among other youth (28.5% vs. 34.4%).

Impact of COVID-19 similar for older and core-aged workers

Unlike the 2008/2009 recession which affected older workers less than core-aged workers, the COVID-19 pandemic has impacted both age groups in a similar manner. From February to May, employment declined by about 11% in both age groups, with a month-over-month increase in May of 2.5% for older workers and 1.5% for core-aged workers.

In May, the number of people aged 55 and older who were not employed and left their job for retirement in the last year was at a level similar to May 2019 (not seasonally adjusted). It remains to be seen whether the impacts of COVID-19 on the labour market may increase retirement in the coming months, or on the contrary, if lost savings may lead workers to delay retirement. The average retirement age (64.3 years in 2019) has trended upward over the last 10 years, reflecting health improvements and an increased labour force attachment among the older population.

No rebound in employment among very recent immigrants

Employment was little changed in May among very recent immigrants (five years or less), with employment being 22.6% below the February level (not seasonally adjusted). Immigrants of more than five years have fared better, with their employment up 2.4% month over month and down by 15.1% compared with February, more in line with the Canadian-born population (+4.6% in May and -10.1% from February to May).

Notable employment gains among the Aboriginal population

There were notable employment gains in May among the off-reserve Aboriginal population (+6.7%), bringing their net employment change from February to May to -10.6%. The comparable figures for the non-Aboriginal population were +3.8% and -12.1%, respectively (unadjusted for seasonality).

Profile of benefit applicants

In May as in April, the LFS included an additional question on applications to federal income support programs such as the CERB and regular EI benefits. The Canada Emergency Student Benefit first became available on May 15 and was not covered by the extra LFS question.

About 6 in 10 (59.4%) of those who had applied for either regular EI or CERB benefits since March 15 were in the core-working age group of 25 to 54. About 1 in 5 applicants (21.9%) were youth aged 15 to 24. Applicants were about equally likely to be women (48.9%) or men (51.2%). This profile was similar to April.

Share of Canadians living in households reporting difficulty meeting financial obligations remains stable

The COVID-19 period has seen many Canadians lose their employment income, particularly those in lower-wage jobs, but has also been marked by government income assistance payments to an unprecedented number of people. The question about the ability of households to meet basic financial obligations (such as rent or mortgage payments, groceries and utilities), added to the LFS in April and May, can help shed light on how households are coping financially.

During the May reference week, over 1 in 5 Canadians (22.5%) lived in a household reporting difficulty meeting immediate financial obligations, up slightly from April (21.1%). Among those aged 15 to 69, the rate remained higher among the unemployed (34.5%), compared with those not in the labour force (24.8%) and those who were employed (18.3%). Among the employed, nearly 3 in 10 (28.0%) of those who had worked less than half their usual hours for reasons likely related to COVID-19 lived in a household reporting difficulties, compared with 16.4% of other employed people.

Among those aged 15 to 69 who lived in a household reporting difficulty meeting financial obligations, 33.4% indicated that they had applied for either CERB or EI benefits since March 15, an increase of 4.1 percentage points from the April reference week. This is compared to 16.1% among those who lived in a household reporting that it was easy to meet financial obligations, an increase of 2.2 percentage points from April (not adjusted for seasonality).

Looking ahead

Employed Canadians less concerned about job security in May

Over the coming months, it is expected that jurisdictions across Canada will continue to re-evaluate and adjust restrictions on economic activity. In turn, labour market conditions are likely to evolve at an uncertain pace and in unknown directions. For some Canadians, recovery from the COVID-19 economic shutdown will mean continuing to work from home, while for others it will mean returning to a traditional workplace, possibly with adaptations to reduce health risks. For others, recovery will involve looking for new work, either in their former industry or occupation or in a new line of work.

Entering this period of change and uncertainty, the extent to which Canadians are concerned about future job loss appears to depend on their experience of the COVID-19 economic shutdown to date. Compared with April, the overall share of employed Canadians who were concerned about job loss fell 5.6 percentage points to 10.8% (not adjusted for seasonality). However, concerns continued to be considerably higher among those who worked less than half of their usual hours during the May LFS reference week (33.1%) than among other employed people (6.3%).

In the June LFS, supplementary questions will be included on the extent to which Canadians are continuing to adapt to COVID-19, including the extent to which workplaces have been adapted to facilitate return to work.

Local Top Line

• May Unemployment Rate: Brantford 11.3% [+] Ontario 13.6% [+] Canada 13.7% [+]
• The local unemployment rate increased by 1.9 month over month.
• The local labour force expanded by 700 month over month.
• The number of employed decreased by 800 month over month.
• The number of unemployed increased by 1,500 month over month.
• When compared to the surrounding CMAs of Hamilton, Niagara, Waterloo, Guelph, and London, Brantford’s unemployment rate is in the middle.

Note: Brantford's unemployment reflects a 3 month moving average, whereas Ontario and Canada are monthly figures. The sample CMA breakdown for Brantford area is detailed in text at the Stats Canada website: http://www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=117159&CVD=117161&CPV=543&CST=01012011&CLV=2&MLV=3