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Philip Cross: Busting a few myths about the gig economy – Financial Post

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Critics of capitalism have established a narrative that more people, especially youths, are condemned to an underclass of “gig” work, precariously extracting a threadbare existence from freelance work as Uber taxi drivers or TaskRabbit handymen. The counter-narrative is that gig work is the inevitable reaction to excessive government regulation of the workplace. The reality, according to a report from Statistics Canada titled “Measuring the gig economy in Canada using administrative data,” is that gig work is a small part of the economy in which few participants are unwillingly trapped for long.

We should be encouraging people to choose the working arrangements that suit them best, not denigrating their choices

Gig work is hardly new. Construction, trucking, freelance writing and many other professions have always had contingent work. The new and supposedly more menacing era of gig work combines technology and rapacious corporate greed to undermine the traditional employer-employee relationship that provides secure employment as well as job training, pension and health benefits. What’s not explained in the new conventional wisdom is why employers suddenly treat their labour force as a liability to be minimized and not an asset to be maximized.

Estimates of the size of the gig economy have been all over the map, partly because most studies have had serious methodological flaws. One predicted in 2017 that by 2020 fully 50 per cent of U.S. workers would be contractors on digital platforms, let alone people working gigs not arranged online. The Bank of Canada speculated that 30 per cent of Canadians participate in the gig economy, though that estimate was based on the shaky foundation of a small sample conducted online combined with an expansive definition of the gig economy. As StatCan wryly noted, the Bank of Canada’s survey included everyday activities like babysitting, dog walking, lawn mowing and housekeeping that “have always been part of daily life, but are not usually considered labour market activities.”

In its new study, Statistics Canada used tax data (which is more precise than surveys) to measure gig work, which it defines as “unincorporated self-employed workers who enter into various contracts with firms or individuals to complete a specific task or to work for a specific time period.”

Its results show that in 2016 8.2 per cent of workers participated at least a little in the gig economy, up from 5.5 per cent 11 years earlier. It accounts for an even smaller part of GDP, as gig work generated only $4,303 a year per person on average, reflecting the fact that most workers only dabbled in the gig economy for a short time to supplement rather than replace their main source of income.

Gig workers are far from being a permanent underclass struggling to join the mainstream labour force: only one-quarter of them stayed in the sector for three years or more. That represents two per cent of all workers. Though “non-negligible,” in StatCan’s words, this hardly represents a fundamental shift in work arrangements or the labour market. Lots of groups make up two per cent of our labour force while getting only a fraction of the attention given to the gig economy. Nearly two per cent of workers are 70 years or older. Another two per cent work in New Brunswick. Neither drives public perceptions of the economy, however worthy and deserving these groups may be.

Another myth-busting finding concerns the common perception that taxi services such as Uber or Lyft dominate gig work. In fact, the taxi industry accounts for only three per cent of men working in the gig economy. Other urban myths do have a kernel of truth: the arts, entertainment and recreation industry, which coined the word “gig” to describe a one-night musical job, employs the most gig workers, who account for about 16 per cent of their labour force. Female gig workers are especially concentrated in health care and such services as cooks, maids and nannies.

Although push and pull factors doubtless motivate people to join the gig economy, the data simply do not allow for their precise measurement. The push factors include job loss — gig work rose during the 2008-2009 recession — or the struggle, especially among youths and immigrants, to find that first job. On the pull side, gig work attracts parents wanting to work flexible hours or older people looking to stay active without a formal or full-time job.

Not everyone is forced into the gig economy. Many people willingly choose work in the gig economy either to stay busy or top up income from their main job. In fact, people over 65 years of age were twice as likely to have gig work as people 25 and under, which belies the image of a lost generation of youths condemned to living precariously from contract to contract.

So another myth about “late stage” capitalism is found to have little foundation in reality. Despite the stereotype of youths being bullied by corporations into accepting precarious freelance work, a more typical gig person works a few hours a month in select years to top up their income, to allow for flexibility in parenting, or to stay busy in retirement. We should be encouraging people to choose the working arrangements that suit them best, not denigrating their choices.

Philip Cross is a Senior Fellow at the Macdonald-Laurier Institute and former Chief Economic Analyst at Statistics Canada.

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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