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Low-Paid Employment and Moving Up: a Closer Look at Full-Time, Full-Year Workers 1996-2001 by Teresa Janz

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Low-Paid Employment and Moving Up: a Closer Look at Full-Time, Full-Year Workers 1996-2001 by Teresa Janz Catalogue no. 75F0002MIE — No. 009 ISSN: 1707-2840 ISBN: 0-662-37994-2 Research Paper Income research paper series Low-paid employment and moving up: A closer look at full-time, full-year workers 1996-2001 by Teresa Janz Income Statistics Division Jean Talon Building, Ottawa, K1A 0T6 Telephone: 613 951-7355 This paper represents the views of the author and does not necessailyr reflect the opinions of Statistics Canada. How to obtain more information Specific inquiries about this product and related statistics or services should be directed to Client Services, Income Statistics Division, Statistics Canada, Ottawa, Ontario, K1A 0T6 ((613) 951-7355; (888) 297-7355; [email protected]). For information on the wide range of data available from Statistics Canada, you can contact us by calling one of our toll-free numbers. You can also contact us by e-mail or by visiting our Web site. National inquiries line 1 800 263-1136 National telecommunications device for the hearing impaired 1 800 363-7629 Depository Services Program inquiries 1 800 700-1033 Fax line for Depository Services Program 1 800 889-9734 E-mail inquiries [email protected] Web site www.statcan.ca Ordering and subscription information This product, Catalogue no. 75F0002MIE2004009, is available on Internet free. Users can obtain single issues at: http://www.statcan.ca/cgi-bin/downpub/research.cgi. Standards of service to the public Statistics Canada is committed to serving its clients in a prompt, reliable and courteous manner and in the official language of their choice. To this end, the Agency has developed standards of service which its employees observe in serving its clients. To obtain a copy of these service standards, please contact Statistics Canada toll free at 1 800 263-1136. Statistics Canada Income Statistics Division Income research paper series Low-paid employment and moving up: A closer look at full-time, full-year workers 1996-2001 Published by authority of the Minister responsible for Statistics Canada © Minister of Industry, 2004 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior written permission from Licence Services, Marketing Division, Statistics Canada, Ottawa, Ontario, Canada K1A 0T6. August 2004 Catalogue no. 75F0002MIE2004009 ISSN: 1707-2840 ISBN: 0-662-37994-2 Frequency: Irregular Ottawa La version française de cette publication est disponible sur demande (n° 75F0002MIF au catalogue). Note of appreciation Canada owes the success of its statistical system to a long-standing partnership between Statistics Canada, the citizens of Canada, its businesses, governments and other institutions. Accurate and timely statistical information could not be produced without their continued cooperation and goodwill. Acknowledgements The author wishes to thank Claude Dionne, Marie Drolet, Gaetan Garneau, Phil Giles, Yves Lafortune, Jane Lin, Sylvie Michaud, Boris Palameta, and Willa Rea (Statistics Canada); and Patrice de Broucker and Ron Saunders (Canadian Policy Research Networks) for their feedback on the methodology or for providing comments on earlier versions of the paper. Table of contents Highlights............................................................................................................................ 6 1. Introduction..................................................................................................................... 8 2. Data Source and Sample ............................................................................................... 10 3. Methodology................................................................................................................. 11 3.1 Definitions ..........................................................................................................................................11 3.2 Logistic regression models .................................................................................................................14 4. Results........................................................................................................................... 15 5. Summary and conclusion.............................................................................................. 19 References......................................................................................................................... 21 Table 1 Probability of low hourly wages in 1996............................................................ 22 Table 2 Probability of upward mobility between 1996 and 2001.................................... 23 Highlights Men who worked full time in low paying jobs for all of 1996 were almost three times more likely than women with similar employment to move into higher paying jobs by 2001. Men had a 73% chance of moving up to a higher paying job compared to 28% for women. While women were only slightly more likely than men to be employed in low paying jobs in 1996, by 2001 they were considerably more likely to be still earning low wages. This study, which uses data from the Survey of Labour and Income Dynamics, profiles Canadian workers who experienced low pay. This analysis covers full-time employees who worked the entire year in order to define a homogeneous study population. It updates a previous study that also included part-time workers and workers who were employed for only part of the year. In the previous study, the difference between men and women in the likelihood of moving out of low paid work was not as pronounced. Individuals with hourly wages of less than $10.95 at the end of 1996 were flagged as low-paid workers. A low paid worker in 1996 was said to have moved up if hourly wages by 2001 were at least $13.26. This level is approximately 10% greater than the threshold for Statistics Canada’s 2001 low-income cut-off for a family of two living in an urban area of at least half a million people. Not surprisingly, employees under 25 (both men and women) were more likely to move up than those between 25 and 44. These younger workers are finishing their education and starting their careers. Having pre-school children in 1996 was also a predictor of moving into higher paid work for employees of any age. As would be expected, those with more education had a lower probability of experiencing low pay. But if they did, they had a higher probability of moving up. University degree holders had an 81% chance of moving up compared to a 46% chance of moving up for those with high school or less. Having a university degree removed any difference between the sexes in the probability of experiencing low pay. Data limitations did not permit a separate analysis of moving up for men and women. Those working in occupations related to services were less likely than those with clerical jobs to move out of their low paying jobs. Services occupations include food and beverage services, protective services, childcare and home support workers, and those in travel, accommodation or recreation. Industrial sectors offering the best chance for moving up included the goods producing sector; business, professional and scientific services; and the public service. Medium-to-large, unionized firms were best. Given these job characteristics would it benefit workers to switch jobs? The study showed that simply changing jobs, even moving from a non-unionized workplace to a unionized one, Statistics Canada 6 75F0002MIE - 2004009 did not increase the likelihood of “upward mobility”. However, there is evidence that moving to a larger firm increased the likelihood of moving out of low pay. This study updates two previous Statistics Canada studies titled “Moving out of low-paid work, 1996 to 2001” released in the Daily on March 26, 2004 and “The upward mobility of low-paid Canadians, 1993 to 1995” released in the Daily on June 17, 1998. Statistics Canada 7 75F0002MIE - 2004009 1. Introduction According to “The Changing Profile of Canada’s Labour Force” based on data from the 2001 Census of Population, one of the three key factors shaping the nation’s workforce between 1991 and 2001 has been the “demand for skills in the face of advancing technologies”. Of the 15.6 million people in the labour force in 2001, more than 2.5 million were in highly skilled occupations that normally required university education. This was a 33% increase from 1991; triple the rate of growth for the labour force as a whole. (Statistics Canada. 2003b). Another important characteristic of the labour force between 1991 and 2001 was the continuing increase in the participation of women. The number of women in the labour force grew at twice the pace of men between 1991 and 2001, increasing 13.8% to 7.3 million. (The number of men increased by 6.0% to 8.3 million.) Women accounted for fully two-thirds, or 884,400, of the overall 1.3 million gain in the labour force during the 1990s. As a result, their share of the labour force increased to 46.7% from 45.0% in 1991. (Statistics Canada. 2003b). Women are continuing to make advances in the work force in terms of factors that have the potential to increase their earnings and status relative to men. For example, they have increasingly been entering traditionally male-dominated fields and are continuing to increase their education level, skill level, and job experience relative to men (Drolet, 1999). Despite these advances, a gender earnings gap remains that research has not been able to explain. The fact that
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