MRO Magazine

Layoffs in latest recession less likely than before, says new study

Ottawa, ON -- Canadian workers were less likely to be laid off during the last economic recession than their counterparts during the two recessions in the early 1980s and 1990s, according to a new study by Statistics Canada. They were also more...


Human Resources

September 27, 2011
By MRO Magazine
MRO Magazine

Ottawa, ON — Canadian workers were less likely to be laid off during the last economic recession than their counterparts during the two recessions in the early 1980s and 1990s, according to a new study by Statistics Canada. They were also more likely to find a job in the short term. The study covered the period from 1981 to 2010.

On a monthly basis, 2.0% of employees were laid off temporarily or permanently between October 2008 and December 2010. This compares with 2.9% during the early 1980s and 2.7% in the early 1990s.

Of all workers laid off between October 2008 and December 2010, 50% found a paid job between one and four months after they were laid off. This compares with roughly 42% during the two previous recessions.

The chances of being temporarily or permanently laid off were relatively high among young people aged 15 to 24, those with no university degree, workers with fewer than two years of seniority and those employed in the goods sector.

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The workers most likely to have found a job in the short term had a university degree, more than five years of seniority, and initially expected to be recalled.

The last recession was also of shorter duration in terms of employment. Total employment on a seasonally-adjusted basis took 27 months to return to its pre-downturn level. This compares with 53 months during the early 1990s and 40 months during the early 1980s.

On average, employees who were laid off during the most recent downturn and who found a job in the short term saw their average weekly wages drop from $734 to $703. Among these employees, one-quarter saw their weekly wages decline by 23% or more, while another one-quarter saw increases in weekly pay of at least 18%.

The study Workers Laid-off During the Last Three Recessions: Who Were They, and How Did They Fare? profiles workers laid off during the downturns that took place during the early 1980s, the early 1990s and from 2008 to 2010. For each downturn, it provides estimates of layoff rates as well as employment rates shortly after layoffs. For the most recent downturn, wage changes experienced by laid-off workers who found paid employment between one and four months after being laid-off were examined. Data came from the Labour Force Survey.

Due to data limitations, the layoff concept used in this study includes both temporary layoffs (in which workers are eventually recalled by their employer) and permanent layoffs. Thus, it is not equivalent to job loss.