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Unpacking the Full Story of Canada’s COVID-19 Related Job Losses

Unemployment in Canada has reached a near-historic high of 13% as three million workers have now lost their job as a result of the COVID-19 pandemic. However, these grim numbers do not show the full extent of the devastation caused by the shutdown on low-wage earners.

In short: According to Statistics Canada‘s April job numbers, only 1.3% of high-wage earners lost their jobs compared to 30% of low-income workers. This means that those already facing economic insecurity were hardest hit by the crisis.

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Health regulations implemented in March to avoid the community spread of the COVID-19 virus forced the closure of many non-essential businesses, leading to millions losing their work.

  • Initially, the services sector was the hardest hit as restaurants, hotels, bars and stores which could no longer accept customers were forced to lay off their staff.
  • In April, the biggest loses were felt by the manufacturing sector where COVID outbreaks led to the closure of construction sites, food plants and other sub-sectors.
Retrieved from StatsCan

Systemic issues? Even before the onset of the global pandemic, many socio-economic indicators highlighted rising wealth-inequality as a problem in Canada. This was reflected by the fact that Canadian jobs have increasingly become part-time and lower paid. Meanwhile:

  • Pre-election polls uncovered that 46% of Canadians were within $200 of insolvency every month while 31% don’t earn enough to cover debt and bills.
  • The CCPA found that as Canadian wages were decreasing, rent was increasing.
  • The youth unemployment rate has risen to a historic 27%. Many of these job loses have come from the in the restaurant industry which employed 1 in 5 young Canadians.

Will the jobs come back? It has been argued that many of these job loses are temporary and will come back once COVID cases come down and society re-opens. However, a recent paper released by the Becker Friedman Institute in the US found that up to 40% of the layoffs will likely turn out to be permanent according to an analysis of previous recessions.

The bottom line: The most severe economic impacts of the COVID-19 pandemic and subsequent shutdowns have disproportionately been faced by low-earning Canadians, many of whom were already in financial insecurity. This has been compounded by the pre-existing wealth inequality crisis already being faced by the country.