Profile of displaced workers

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There's an interesting new research report from Statistics Canada, by Ping Ching Winnie Chan, Rene Morissette, and Marc Frenette, profiling the workers who were displaced in the recent recession, and comparing the outcomes to previous recessions in earlier decades (the downturns of the early 1980s and 1990s). Workers Laid Off During the Last Three Recessions is part of StatsCan's Analytical Studies series.

I haven't been through the report in detail and can't comment on the methodology, but here are some of the interesting (and often surprising) findings:

- The risk of being laid-off in the past recession was 2 per cent, somewhat lower than in the 1980s (2.9 per cent) or 1990s (2.7 per cent) recessions. I wonder if the data is missing some of the new ways that disemployment occurs -- like simply not having your contract renewed?

- Curiously, laid-off workers in this recession were older, better-educated, and less likely to have been employed in manufacturing than in previous recessions. Maybe that's in part because so much of the reduction in manufacturing employment in Canada in this cycle occurred before the onset of the "official" recession in the fall of 2008. By then, most of the lost manufacturing jobs had already disappeared (in a downturn that dates back to 2004).

- Half of laid-off workers in this recession found another job within 4 months of lay-off -- somewhat higher than the 42 per cent average re-employment success in earlier recessions. This reflects the fast (but partial and ultimately stalled) rebound in employment that typified this downturn.

- The average wage for those who found new work declined by about 5 per cent (from $734 per week to $703). But for one-quarter of those who found new work, the wage fell by 23 per cent or more. By the same token, some re-employed workers saw their wages increase.

- Those who experienced the biggest wage drops in their new job, not surprisingly, are former union members, those who used to work for large firms (over 100 employees) and ended up in smaller firms, and those who had to change both their industry and their occupation to attain a new job.

- Of course, the drop in incomes was all the worse for the large proportion of laid-off workers who did not find new work.

Clearly we're not out of this crisis yet, and the data in this report indicate that hundreds of thousands of Canadians are still suffering badly from the 2008-09 recession. That will make the next downturn all the more painful.

Jim Stanford is an economist with CAW. This article was first posted on The Progressive Economics Forum.

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