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Trends in Low-Wage Employment in Canada: Incidence, Gap and Intensity, 1997-2014

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  • Jasmin Thomas

Abstract

This paper introduces two new concepts to the debate on job quality: the low-wage gap and low-wage intensity. These two measures provide information on the depth and severity of low wages. Using Labour Force Survey microdata, we discuss trends in these two measures, along with trends in the incidence of low wages over the 1997-2014 period. For example, in 2014, 27.6 per cent of all employees aged 20 to 64 years earned less than two-thirds of median hourly wages for full-time workers aged 20 to 64 years (or $16.01 per hour), our low-wage cutoff. In this same year, the low-wage gap was 21.0 per cent, which means that the average low-wage employee earned approximately 79.0 per cent of the low-wage cutoff (or $12.66 per hour). Consequently, low-wage intensity, defined as the product of the incidence and the gap (scaled by 100) was 5.8. This is down from an intensity of 6.3 in 1997, which was the result of a slightly higher incidence (27.9 per cent) and a higher gap (22.7 per cent). This paper also provides these results by gender, age, educational attainment, industry, occupation, employment status and province. These detailed results help identify which groups face the highest rates, greatest depths, and largest intensities of low-wage employment in Canada. Furthermore, this paper explores the implications of a $15 minimum wage on the low-wage gap in 2014. Finally, to provide a brief sensitivity analysis, we discuss (1) the results for low-wage employment in Canada using a different cutoff (two-thirds mean hourly wages for full-time employees aged 25 to 54 years) and (2) comparisons of our results to those of CIBC’s Employment Quality Index and the OECD’s low-pay data.

Suggested Citation

  • Jasmin Thomas, 2016. "Trends in Low-Wage Employment in Canada: Incidence, Gap and Intensity, 1997-2014," CSLS Research Reports 2016-10, Centre for the Study of Living Standards.
    • Handle: RePEc:sls:resrep:1610
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    File URL: http://www.csls.ca/reports/csls2016-10.pdf
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    References listed on IDEAS

    as
    1. Andrew E. Clark, 1998. "Measures of Job Satisfaction: What Makes a Good Job? Evidence from OECD Countries," OECD Labour Market and Social Policy Occasional Papers 34, OECD Publishing.
    2. David A. Green, 2015. "Chasing after good jobs. Do they exist and does it matter if they do?," Canadian Journal of Economics, Canadian Economics Association, vol. 48(4), pages 1215-1265, November.
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    Cited by:

    1. James Uguccioni, Andrew Sharpe and Richard Beard, 2017. "The Human Development Index In Canada: Ranking the Provinces and Territories Internationally, 2000-2015: An Update," CSLS Research Reports 2017-06, Centre for the Study of Living Standards.
    2. Inez Hillel, 2020. "Holes in the Social Safety Net: Poverty, Inequality and Social Assistance in Canada," CSLS Research Reports 2020-06, Centre for the Study of Living Standards.

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    More about this item

    Keywords

    Low-Wages; Low-Wage Employment; Job Quality; Well-Being; Employment Quality; Minimum Wages;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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