Not all aspects of good jobs can be easily tracked, so employment quality or good jobs indexes typically include a selection. CIBC’s Employment Quality Index has just three indicators: the growth of full-time high paying jobs, the share of full-time and part-time jobs, and paid employees vs. self-employed. The international Just Jobs Index covers opportunities for work, income, employment security, pensions, benefits, gender equality, and social dialogue. Not to be left out, the TD Bank now claims it has developed one labour market indicator to rule them all.
Central banks are also getting more methodical about measuring broader labor market conditions. The US Federal Reserve includes 19 indicators in its Labor Market Conditions Index. The Bank of Canada includes just eight in its new Labour Market Indicator.
Some might wonder why central banks are now interested in monitoring job quality. Aren’t they more interested in the financial side of the economy?
Historically there has been some relationship between lower rates of unemployment, higher wages and higher inflation. It had a name: the Phillip’s curve. That relationship has almost entirely broken down. Lower rates of unemployment haven’t resulted in much wage growth, or a revival of economic demand and growth. Without increases, there’s little pressure on prices from the demand side. That’s why central banks have kept interest rates so low for so long, and it’s why they’ve started monitoring employment quality. It’s also why other banks are also interested; they want to know where the Bank of Canada will make its next move on interest rates.
Monetary policy and low interest rates aren’t boosting growth because they’re being stymied by government policies—spending cuts, wage freezes, contracting out, regressive tax measures, deregulation, and more—that undermine wages, the power of labour and equality.
Monetary policy and low interest rates aren’t boosting growth because they’re being stymied by government policies https://t.co/yCBoUuiKu2— CUPE National (@cupenat) June 10, 2015
Even major international economic organizations, the International Monetary Fund, OECD, International Labour Organization, World Bank, all agree that we need stronger wage growth and greater equality to achieve greater economic growth.
Oh, and those job quality indexes? They’ve all been pointing in the same direction: down.
CIBC’s employment quality index is now at a record low, 15 per cent below the early 1990s. TD’s index recently showed its widest gulf in job quality since the 2008-9 recession. Canada’s rank on the most recent international Just Jobs Index dropped to 12th, the lowest in a dozen years. There’s been little improvement in the Bank of Canada’s Labour Market Indicator in the past few years, even as the unemployment rate has declined.
As long as our governments work against our economic needs, we’re not going to have much improvement in job quality, or economic growth.