Job losses in manufacturing impact employment rates, wages

Employment rates and wages fell for men in manufacturing during 2000 to 2015. Photo: Fotolia

OTTAWA — Manufacturing jobs in Canada have been in decline since the early 2000s, but how is that affecting employment rates and wages?

A Statistics Canada study of the period from 2000 to 2015 offers some insight for men, but women will require more study. The results provide little evidence a decline in employment or wages led to reduced rates for the ladies in study areas.

During the study period, the percentage of men aged 21 to 55 employed full time for at least 48 weeks fell from 63.6% to 58.6%. This reduction was more pronounced in CMAs (census metropolitan areas, one or more municipalities around a core) and CAs (census agglomerations, high population density with infrastructure) that experienced greater-than-average declines in manufacturing.

For example, men’s full-year, full-time employment rates fell by 10 percentage points or more in the Ontario areas of Windsor, Oshawa, St. Catharines–Niagara and Kitchener–Cambridge–Waterloo. The decline for employees aged 21 to 55 was between eight and 10 percentage points. This is roughly twice the decline observed across all CMAs and CAs. Using census data, the study founds this led to an average 4.5-percentage-point loss among men living in the study areas.

The study also noted the five-percentage-point decline in manufacturing employees led to an average 6.9% loss in real weekly wages, especially among less educated men. Estimates suggest wages of those with a high school diploma or less were reduced by at least 7.3%, compared with a 4.8% loss for those with a bachelor’s degree or higher. Less educated young men saw an 8.7% drop in real weekly wages.

Reduced real wages for men were not affected by internal migration.

Download Study: The impact of the manufacturing decline on local labour markets in Canada here.