Prepared in November 1998 by Wendy MacDonald of Wendy MacDonald & Associates, in her capacity as Research Director for the Employment Summit Panel.
© 1998 Wendy MacDonald & Associates
This file has been posted electronically for your convenient reference, but it has been partially re-created through scanning and may contain typographical errors not found in the original.
On October 22, 1998, the PEI Employment Summit was announced. A five-member independent panel, coordinated by the Institute of Island Studies at UPEI, will hold public meetings across PEI to gather the views of individual Islanders and groups on strategies and practices to improve employment in PEI. This backgrounder has been prepared to provide some facts and information on employment and unemployment in PEI: trends over time, comparisons to other parts of Canada, and patterns among various groups of Islanders and the different regions of PEI.
Employment in PEIHigh labour force participation: In 1997, PEI's labour force was 71,100 people, out of a working age population of 107,300, giving PEI a labour force participation rate of 66.3% -- well over the Canadian average and the highest in Canada other than in the Prairies.1
Rapid job growth: During the past decade, PEI has experienced one of the fastest rates of job growth in Canada, exceeded only by Alberta and British Columbia. In 1978, PEI had 45,400 jobs; in 1988, 54,300 jobs; in September 1998, 61,100 jobs. Strong growth in labour force participation, however, has meant that unemployment has increased even more rapidly than employment. It more than doubled from its 1978 average of 4,900 unemployed to a 1993 peak of 12,000 unemployed and its 1997 average of 10,600 unemployed. Part-time employment has also accounted for an increasing number and share of jobs.2
Skilled jobs: catching up but still lagging: Between 1991 and 1996, the number of jobs in PEI requiring at least some post-secondary education increased by 33%, or 8,200 jobs -- much faster than the national or Atlantic average. Jobs requiring high school or less, meanwhile, decreased by only 5% or 1,400, a much smaller decline than elsewhere. As such, the proportion of skilled jobs in PEI increased from 47% of the total in 1991 to 55% of a bigger employment pie in 1996 -- compared to an increase in the Atlantic region from 52% to 60%, and a Canadian increase from 52% to 59% over that time. PEI closed the gap slightly with Canada, but continues to lag behind the region in terms of the share of skilled jobs in its economy, despite rapid growth of these jobs. This is due to the fact that PEI lost far fewer unskilled jobs than the other provinces in the region.3 This likely results in part from substantial and increasing government investment in creating social employment for disadvantaged Islanders.
Resource-based, but shifting to a service economy: Compared to the Canadian average, PEI still has a high proportion of its jobs in the primary and food processing sectors. PEI continues to trail in the share of the economy accounted for by such high-knowledge, high-value, high-wage sectors as FIRE (Finance, Insurance, and Real Estate); Services to Business; and Transportation, Utilities and Communications.
Over time, however, PEI's economy is moving closer to the Canadian norm. During the past decade, PEI saw job losses of 8% in the primary sectors, more than double the national job loss of 3.5%, and job growth in the services and manufacturing sectors. In the high-value, knowledge-based sectors of FIRE and Services to Business, it had faster growth than any other Canadian province (24% and 83% respectively, compared to national averages of 3% and 44%).
Manufacturing jobs increased by 27% on PEI, while nationally, manufacturing jobs declined by 3%. The only area in which PEI lost ground, other than the primary sectors, was the area of transport, utilities, and communications, down by 28% compared to national growth of 3% [in part a result of job losses from the termination of Marine Atlantic ferry services.]4
Major variations in structure of employment across PEI, shrinking slightly: Significant variations exist among Island counties in the structure of employment. The changes that took place between the 1991 and 1996 Censes saw these variations narrow slightly. In 1991, the resource-based sector dominated the Kings County economy, making up 45% of total employment, including 15% in the fishery and 20% in the manufacturing sector, largely concentrated in fish processing. Queen's County, meanwhile, had a strongly service-based economy, with higher than average shares of employment in the high- value-dynamic services sector (transport and communications, FIRE, services to business, and wholesale trade) and in the public sector (education, health, and public administration) as well as the lower-paid retail trade, hospitality and other services sectors. Prince County's structure of employment was midway between these extremes.5
By the 1996 census, some modest changes were evident. An overall shift in employment from the public sector to the private sector was evident, with public sector employment falling from 28% of the total to 25%. This shift was distributed quite evenly across the three counties. A slight decline in resource-based manufacturing took place in Kings. All three counties saw noticeable growth in the dynamic services category, with Kings and Prince catching up somewhat with Queen's. Within the "other services" category, all three counties saw declines in the retail trade sector and increases in the accommodations and food sector.6
Seasonality still a major factor, especially in rural areas: PEI has a highly seasonal economy: 26% of its labour force is employed on a seasonal basis, compared to 17% in the Maritimes, and 10.5% in Canada. Within the Maritimes, only Northern New Brunswick is more seasonal. This seasonality is partly due to the major economic role of the resource-based industries, which account for 25% of the employment but 44% of seasonality. However, it permeates almost every aspect of PEI's economy: in twelve out of fourteen economic sectors, the rate of seasonality is higher than the Maritime average. The difference in rates is particularly acute in the transportation, manufacturing, construction, and accommodation and food sectors, and are more than 50% higher than the Maritime average. In public administration as well, seasonality is 44% higher than the Maritime average, a reflection in part of the extensive use of casual labour by provincial and municipal governments. The impact of seasonality on Islanders can be seen by the fact that the 26% of the labour force in seasonal work earns only 12.6% of the wages.7
A low-wage economy: In 1997, PEI had the lowest average wage in Canada, at $441 a week, compared to a national average of $614. One might think that this is a result of the larger role of low-wage industries and sectors in the PEI economy. However, research by Statistics Canada indicates that wages are low in all sectors of the Atlantic region's economy, compared to the national average. Workers in almost every industry make less, sometimes far less, than their counterparts in the rest of Canada. If PEI had the same structure of industries as the rest of the country, their research indicates, its average weekly wage would be only slightly higher.
In 1997, PEI was tied with Manitoba for the fourth lowest minimum wage in Canada, at $5.40. However, only 4.2% of PEI's workers earned the minimum wage, the third lowest proportion in the country. Nationally, minimum wage employment tended to be concentrated among youth.8
High and growing rates of self-employment: A substantial proportion of Islanders are self-employed -- 18% in 1996, compared to an average of 14.8% for the other Atlantic Provinces and 16.6% for Canada. Higher than average levels of self-employment are found not only in the primary industries, which make up such a relatively large proportion of PEI's economy, but also in most other sectors of the economy. The exceptions are the education and health sectors, where self-employment is less common than in the rest of the region or the country.
Men account for a larger share of the self-employed than in other provinces: 24% of male Islanders are self-employed, compared to 11% of women. While this level of self-employment might be thought to bode well for the entrepreneurial future of PEI, the age profile of the self-employed paints a slightly less encouraging picture. Young Islanders, aged 15 - 24 are close to the national average of 7.3% in self-employment, and well below the levels in the other Atlantic Provinces, which range from 9.4% in Newfoundland to 12.4% in Nova Scotia. Islanders over the age of 55, on the other hand, have very high rates of self-employment -- 41%, compared to a regional average of 31% and a national average of 33%.
The self-employed in PEI earn slightly less, on average, than do Island employees -- $24,685 in 1995, compared to $25,563 for employees. However, they earn closer to their counterparts in the rest of Canada, at 80% of the national average, than do Island employees, at 76%.9
Unemployment in PEIHigh rates of unemployment, peaking in 1993: During the past two decades, PEI experienced steady increases in its unemployment rate throughout the 1980s and early 1990s, peaking at over 18% in 1993 before declining to its August 1998 low of 13%. Youth have been particularly hard hit by unemployment throughout this period. Gender impacts for adult workers shifted over this period, however, with women over 25 experiencing higher rates of unemployment than men in the 1980s and early 1990s, then falling below the male rate and the overall average in the mid-1990s.10 Generally, unemployment rates among the groups have converged on the average in recent years. Discouraged workers are less common in PEI than in the rest of the Atlantic Provinces, amounting in 1997 to some 500 Islanders who had given up looking for work, adding about 0.7% to the official unemployment rate. Nationally, discouraged workers tend to be older and less educated than the rest of the labour force.11
Heavy reliance on Employment Insurance: Statistical data from income tax filings indicate that employment insurance makes up a greater proportion of income in PEI than in most other parts of Canada. Reliance on EI is particularly widespread in Kings and Prince Counties. In 1992, EI represented 17.6% of PEI's employment income, compared to 10.2% in the Maritimes and 5% for Canada. Earnings from employment, meanwhile, account for only 63.8% of total income in PEI, compared to 67.8% in the Maritimes and 72% in Canada.12
EI changes have had substantial effects: The Employment Insurance program has undergone a series of reforms in the 1990s, including increased entrance requirements, more stringent eligibility requirements, fewer weeks of benefits, and reduced rates of benefits for repeat users. Nationally, these have contributed to a substantial drop in the number and proportion of unemployed receiving EI benefits: in 1997, 43% of Canada's unemployed received benefits, compared to 83% in 1989. In PEI, 83% of the unemployed received benefits in 1997, down from 129% in 1989, but still the highest proportion in Canada. (The rate of 129% in 1989 was due to the fact that a number of individuals receiving benefits were not defined as unemployed by the Statistics Canada Labour Force Survey. Some of these people were on parental, disability or special leave, or were not looking for work owing to the local level of unemployment.)13
Declines have taken place in several EI indicators in PEI, partly as a result of the program changes and partly as a result of changing labour market conditions:
- Total annual EI benefits declined 19% from a 1993 peak of $216 million, to $175 million in 1997.
- Total number of weeks paid to beneficiaries declined 26% from a 1992 high of 850,020, to a level of 628,660 weeks in 1997.
- The average monthly number of beneficiaries declined 26% as well from a 1993 high of 15,936, to a level of 11,806 in 1997.
On the other hand, the average weekly benefit has increased slowly but steadily during the past two decades, reaching a high of $279 in 1997.14
Seasonality evident in EI claims: Compared to a representative sample of thirteen other centers and regions across Canada, PEI continues to show evidence of seasonality. Some modest signs of improvement are in evidence, however. PEI has seen a slight increase in the average number of weeks worked prior to filing an EI claim. However, other regions improved more quickly, moving PEI from third last place on this indicator in 1991, to last place in 1996.
A more significant drop has taken place, however, in the proportion of Islanders filing a claim with the minimum number of weeks, with a drop from the 1993 peak of 26%, to 9.4% in 1996. On the other hand, the proportion of Islanders filing with two weeks above the minimum jumped from 4% in the first half of 1996, to 13% in the second half.
Despite improvement, both indicators -- average weeks and minimum weeks -- remain significantly less favorable than the average of the fourteen regions examined in the study.15
As can be seen in the foregoing descriptions, Islanders experience different patterns of employment and unemployment depending on their age, gender, and region of PEI. This section examines some of these patterns more closely.
Youth employment improving somewhat: As indicated earlier, rates of youth unemployment in PEI have persistently exceeded those of adult workers, but are coming down toward the average in recent years. Cross-Canada data indicate that, in fact, Island youth are less disadvantaged in the labour market than are most of their counterparts elsewhere. Island youth aged 15 to 24 are more likely to be participating in the labour force, and they are more likely to be employed. Indeed, as indicated in the graph (heavy lines are PEI's), throughout most of the past two decades, Island youth have been more likely to be employed than youth elsewhere have been likely even to participate in the labour force.
The statistics outlined above mask some significant differences between students and non-student youth. Island youth are slightly less likely than average to be in school, but those Island youth who are students have a summer employment level that is significantly in excess of levels anywhere else in Canada, and has been for many years. Non-student Island youth face a less positive employment picture, coupling very high participation rates with the second highest rates of youth unemployment in Canada.16
Although hours of work have shifted towards part-time in the past two decades in PEI, as they have elsewhere, Island youth are slightly more likely than average to be working full-time or overtime, a pattern holding for both students and non-students.17 Island youth earn a much lower average hourly wage than do adult Islanders ($7.33 in 1997, compared to $12.96 for adults). However, Island youth have less of a wage gap with their counterparts elsewhere than do adult Islanders (in 1997, youth earned 82% of the Canadian average hourly wage for youth; adults earned 77% of the national average for workers over 25). Island youth also have less of a wage gap with older Island workers than is the case nationally.18
Women's employment picture also improving somewhat: The employment picture for adult women in PEI exhibits some similar characteristics to that for youth: disadvantaged, but less so than their counterparts elsewhere, and catching up over time. Like youth, PEI women have very high rates of labour force participation, leading to fairly high rates of both employment and unemployment. Unlike youth, however, who have had a high participation rate throughout, women have achieved a substantial increase in their labour force participation rate and employment rate over the past two decades.19 Married women and women with children are more likely than single women to participate in the labour force; over 80% of women with all their children under the age of 6 were in the labour force in 1991, a higher level than in other provinces.20 Women are more likely than men to be working part-time,21 but on the other hand are slightly more likely than men to have a permanent job (78% of women compared to 76% of men in 1997). In the temporary jobs category, women are more likely to be working on a term, contract, or casual basis, while men are more likely to be seasonal.22
Employment increases have slowed in the past several years, while unemployment rates peaked in 1992 and have declined since then. In 1997, the women's unemployment rate fell below that of men and below the provincial average. Generally, women have been more represented in many areas of employment growth, while men have been more represented in the areas of employment decline in PEI. As well, the growth in knowledge jobs in PEI noted earlier in this backgrounder is favorable for women, who have a higher level of education on average than do Island men.
Women experience earnings inequality in PEI as they do in the rest of Canada, but the gap is smaller -- indeed, the smallest in Canada. In 1997, PEI's adult women earned an average of $11.07 an hour, or 88% of the average $12.61 an hour earned by adult men in PEI. Nationally, women earned 82% of men's average hourly rate, while in Alberta, the province with the largest gap, they earned 76% of men's average wage.23
Self-employment among women has been increasing steadily since the mid-1980s, reaching 10.8% in 1996. It remains slightly less common among Island women, however, than in the other Maritime provinces and noticeably below the national average of 12.5%.24
Older workers echo pattern of women, youth: Older workers in PEI, i.e. those over 55, also exhibit higher participation rates and, accordingly, slightly higher rates of both employment and unemployment than the national average, and significantly higher rates than in the rest of the Atlantic region. Labour force participation is particularly strong among men aged 60 - 64 -- at 55%, eight percentage points higher than the national average of 47%. Older Island women are also more likely than their counterparts elsewhere to be in the labour force. Those women who participate, as well, are more likely to be employed than are older Island men.25 Rates of self-employment among older Islanders, particularly men, are very high compared to the region and the national average: 41%, compared to a national average of 33%. This rate reflects self-employment of 50% among older Island men, and 27% among older Island women.26
Education and EmploymentLevels of education lagging: Educational attainment is increasingly linked to employment and earnings prospects, in PEI as elsewhere, as demand grows for highly educated workers while less skilled jobs disappear. The educational level of PEI's labour force is somewhat below the regional average, and more substantially below the national average in most categories. Over 28% of Island workers have not completed high school, compared to 21% nationally. Less than 13% have university degrees, compared to 17% nationally. On the other hand, the proportion of Islanders with a post-secondary certificate or diploma is similar to the national average of 31%.27
Emerging shortages of skilled workers: As previously noted, major employment growth has taken place since the beginning of the decade in jobs requiring at least some post-secondary education, while declines have taken place in jobs requiring high school or less. The shifting patterns of sectoral employment, with growth in the dynamic services sector, bears this out. In fact, in 1996 the proportion of jobs requiring at least some post-secondary (55%) outstripped the proportion of the labour force with those qualifications (53%), suggesting that future employment prospects for those workers will be good. On the other hand, there is a surplus of less educated workers (47%) for a shrinking pool of lower-skilled jobs (45%).
Higher unemployment among low-skill jobs: Not only are lower-skilled jobs declining in proportion and in absolute numbers, they are also far more vulnerable to unemployment than are higher-skilled jobs. The chart on the right indicates that unemployment is concentrated in the lower two skill types. [It must be noted that the data in the chart is drawn from two different sources at different points in time, and thus is not entirely comparable.] The largest single group of unemployed was in the second-lowest skill category people who had not finished high school but who had two years or less of some sort of post-secondary training. The group of workers in the lowest skill jobs, requiring Grade 10 or less, were smaller in number but even more likely to experience unemployment.28
Youth participation in education falling further behind Canada: The shift to higher-knowledge, higher-value, higher-wage jobs holds promise for the future of PEI. This promise will only be fully realized in future, however, if Islanders gain the education and skills to fill those jobs. In this regard, evidence is mixed. The participation of Island youth aged 15 - 24 in education lags behind other provinces, with the exception of the Prairie provinces. While this participation has increased over the past decade, most other provinces have seen larger increases. As such, since 1989, PEI has lost ground against other Canadian provinces, again except for the Prairies. Particular slippage took place in university participation; PEI's rate increased from 14.5% in 1989, to 15.5% in 1996, but this modest increase caused it to fall from second highest to the middle of the pack among Canadian provinces, and behind the other three Atlantic provinces. On the other hand, participation in community college increased faster than in any other province, taking PEI from last place in 1989, to, again, the middle of the pack by 1996.29
Adult learning faces uncertainties: Adult workers, meanwhile, face a changing world with regard to training and education. In 1993, participation in adult education among Islanders over 25 was higher than in the rest of the Atlantic provinces.30 However, continuing increases in the cost of higher education, coupled with policy changes to the funding of skills training, may put this level of participation at risk. These policy changes include an overall shift of labour market development resources from training and skills development, to employment development, and also, a shift from full funding of training costs, to a mix of loans and grants. On the other hand, new opportunities exist through technology-based distance learning, and through the development of community-based Learning Centers throughout PEI. These opportunities are likely to be of particular benefit to the most disadvantaged Islanders in terms of skills and education.
The employment issue on PEI is complex. On the whole, available data suggest an overall improvement in the quality and quantity of jobs available to Islanders. On the other hand, many Islanders continue to suffer from unemployment and underemployment, and its resulting stresses on individuals, families, and communities. This backgrounder seeks to provide some quantitative data on employment and unemployment. A full picture, however, of impacts, opportunities, and future directions can only be painted by listening to Islanders. The Employment Summit is intended to fulfill that role.
Notes1. Statistics Canada, Labour Force Update: An Overview of the 1997 Labour Market, Cat. # 71-005, Table 6, pp. 42-43.
2. Statistics Canada, Historical Labour Force Statistics, Cat. # 71-201, pp. 76 - 96.
3. Atlantic Provinces Economic Council, "IT: Transforming the Atlantic Economy," Presentation in Charlottetown PEI, November 1997.
4. Overview of the 1997 Labour Market, op.cit., Table 9, pp. 48 - 49.
5. Beaudin, Maurice, The Economic Region of Prince Edward Island (Moncton: Canadian Institute for Research on Regional Development, 1998), Table 10.
6. Statistics Canada, 1996 Census, Sub-Provincial Data.
7. Beaudin, op.cit. p. 56.
8. An Overview of the 1997 Labour Market, op.cit., pp. 26 - 27.
9. Statistics Canada, Labour Force Update: The Self-Employed, Cat. # 71-005, October 1997.
10. Historical Labour Force Statistics, op.cit.
11. Globe and Mail, November 9 1998, "The really discouraging number," p. 2.
12. Beaudin, op. cit., p. 62.
13. Applied Research Branch, Human Resources Development Canada, An Analysis of Employment Insurance Benefit Coverage, (Ottawa, Paper W-98-35E, 1998), p. 49.
14. Provincial Treasury of PEI, Statistical Review 1997 (Charlottetown, 1998), Table 11, p. 19.
15. Human Resources Development Canada, Annual Report on EI Changes, 1998.
16. Statistics Canada, Labour Force Update: Youth and the Labour Market, Cat. # 71-005, March 1997.
17. Statistics Canada, Labour Force Update: Hours of Work, Cat. # 71-005, Summer 1997.
18. An Overview of the 1997 Labour Market, op. cit., Table 11.
19. Historical Labour Force Overview, op.cit, pp. 89 - 90.
20. Provincial Treasury, Women in Prince Edward Island: A Statistical Review (Charlottetown, 1996).
21. Ibid., p. 3-15.
22. An Overview of the 1997 Labour Market, op.cit., Table 12.
23. An Overview of the 1997 Labour Market, op.cit., Table 11. See also Statistics Canada, Labour Force Update: A New Perspective on Wages, Cat. # 71-005, August 1998.
24. The Self-Employed, op.cit., Tables 14 and 15.
25. Statistics Canada, Labour Force Update: Older Workers, Cat. # 71-005, May 1998, Table 2.
26. The Self-Employed, op.cit., Tables 14 and 15.
27. Statistics Canada, Labour Force Survey1996.
28. Human Resources Development Canada, Analysis of Selected Client Groups in P.E.I., (Unpub. Report, June 1996), Charts 3 and 10.
29. Youth and the Labour Market, op.cit., Tables 21 and 22.
30. Atlantic Provinces Education Foundation, Education Indicators for Atlantic Canada, 1996 (Halifax: Atlantic Provinces Education Foundation, 1996), Figure 6.1.2.
© 1999 The Institute of Island Studies
Institute of Island Studies