The Costly Lesson

I recently heard a sad story about a skilled tradesman who agreed to do a project for a contractor.   The tradesman completed the work and then went to collect his pay.  The contractor was not there.  The tradesman went back the next day and the day after – still no contractor.  No one on the job site knew where the contractor was and hadn’t seen him since the tradesman had.

The tradesman went to the builder and learned that the contractor had been paid the day he was supposed to be.  The guy had literally disappeared.  The tradesman had worked for a week and a half, finished the work he was to do and didn’t get paid. He was out the $2000 he was supposed to be paid.  There was nothing he could do about it because he couldn’t take back or undo the work he did.

There are some practical things every gig worker must do to protect themselves and ensure that they aren’t taken advantage of:

  1. Know what the value of your work is and establish the price for it accordingly.
  2. Make sure you know who you are working with – name, address, phone number and what the status of the person you are talking with is – an owner, a contractor, a subcontractor.
  3. Establish the exact work that is to be done, what the expected results are and the key completion stages during the project.  At each stage of your work, have the person you are working with sign off on the work as having been completed satisfactorily.
  4. Establish a fair price for the work and obtain a deposit for at least 10% of the total price of the agreed-upon work, before starting the job. Don’t do any work until you receive your deposit.
  5. Establish the amount to be paid at each of the key points during the project. Always get your payment before you start the next stage of the work.
  6. Establish the way the payment is to be made: the best option for all gig workers is e-transfer because you know you have the money. Always check your bank account to be sure the transfer has been deposited.

Some other important things:

  1. Ask other workers in your industry if they know of the person you are thinking about working with and find out what that person’s reputation is.
  2. Be careful not to charge too little.
    • There usually aren’t any benefits, income taxes, EI or CPP payments made in these types of work arrangements. Those are costs you need to cover.  If you are doing work where WCB is required be sure the coverage includes gig workers.
    • If you cut your rate below that of others just to get the work, others will do the same thing and before long the work will be poorly paid.
    • If you underprice the work you do, others will not see it as being valuable.
  3. Be sure you maintain and develop the knowledge and skills necessary to deliver the product/service at the quality expected, and on time. AND learn the managerial skills that are essential to be a successful entrepreneur.

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Ghosts in the Workforce

My best estimate is about 3.6 million ghosts in the void between Canada’s Labour Force and the Labour Force Participation Rate. They are the not still-in-school, retired, employed and unemployed members of the Labour Force.

If we assume that 50% of them are not working from choice or necessity, for example, parents who are no longer eligible for unemployment insurance and who are home with kids, we are still left with a pretty good-sized number.

GHOSTS – more commonly known as informal workers –are temporary and paid in cash (no EI, CPP, Income Tax or other benefits).  A considerable number of those are poorly paid – minimum wage or less – carrying out a variety of activities: child/ elder care, house cleaning,  ride-share driving, dog walking, freelance work like painting murals, web design work, or buying and reselling goods on websites like eBay or at flea markets. Some informal workers are also making a considerable amount of money because they have highly valued abilities and skills and choose to work outside the formal economy.

Temporary work has come to be known as Gig work.  Gig was a slang term coined by jazz musicians in the 1920s referring to their having obtained an engagement. 

The reasons for doing gig work (side hustles) include: unable to find a job and the bills have to be paid, add layer of income security due to economic uncertainty, supplement income (job doesn’t pay as much as wanted/needed), develop new skills, and to make it possible to manage a life or lifestyle where a regular job doesn’t work.

The Gig economy consists of both formal and informal workers who are:

  • People who have regular full-time jobs
  • People in part-time jobs who want or need more flexibility than is available in full-time jobs, or who can’t find a full-time job do gig work for those same reasons
  • People whose jobs have disappeared and aren’t ever coming back because the industry is declining and/or technology has reduced the need for human workers
  • People who cannot commit to, or don’t want regular employment, or who are outside the frame of being acceptable employees.

Stay tuned for more about Gigs and the future of work.

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I’m Worth More Than This

That comment has been made so often in my HR career when people are frustrated with the amount of their pay or pay raises.  My response is always “of course YOU are worth more”.  The pay for this job is not only about you and the way you do the job.  It is highly dependent on what the job itself is worth.

Job value is driven by several factors beginning with the knowledge, skills, and abilities required to carry out the tasks involved in that job, followed by the prevalence of that bundle of knowledge, skills, and abilities in the market.  When something is essential and/or highly desirable and is rare it is more valuable than when it is plentiful.

When that bundle of knowledge, skills, and abilities (KSAs)  is fundamental to an organization’s business success, the job value is higher than when it is a support function, for example, Human Resource KSAs as an internal service in a manufacturing company  are worth less than they are in an H.R. Consulting practice where they are the source of revenue.

In each of the last three industrial eras – mechanization, electrification, computerization -new KSAs were in high demand and many traditionally valuable KSAs became redundant.  We can expect that to continue occurring as we move through the Fourth Industrial Revolution – digitization.  The World Economic Forum’s 2018 “The Future of Jobs Report” included Sports Instructors, Editors, Lifeguards, and Customer Service Reps among the declining jobs in North America. Emerging job roles and therefore valuable roles include the following:

  • Software and Applications Developers and Analysts
  • Data Analysts and Scientists
  • Sales and Marketing Professionals
  • Financial and Investment Advisors
  • General and Operations Managers

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Alligators and Alienation

The following visual comparison of average weekly wages and CPI (proxy for cost of living) instantly made me think of “when you are up to your ass in alligators it is hard to remember ….”

The differences in wages as compared to Cost of Living (buying power) situations for Canada as a whole and Alberta are insightful.  The Global recession (2010) hit Canadians’ buying power about twice as hard as it did that of Albertans.  The Energy Industry crash hit Albertans about twice as hard as it did Canadians as a whole.

Statistics Canada.  Table – 18-10-0005-01   Consumer Price Index, annual average, not seasonally adjusted
Data Source: Statistics Canada. Table  14-10-0203-01   Average weekly earnings by industry, monthly, unadjusted for seasonality

Statistics Canada.  Table – 18-10-0005-01   Consumer Price Index, annual average, not seasonally adjusted
Data Source: Statistics Canada. Table  14-10-0203-01   Average weekly earnings by industry, monthly, unadjusted for seasonality

It is easier to understand how simple it is to be insouciant when the alligators are bigger and closer to you than they are to the others.

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Which Industries Pay Best? 

Statistics Canada tracks the average weekly wage for Canada, the provinces, and territories.  The data is tracked by Sector (Goods Producing and Services Producing) and by Industry using the North American Industry Classification System.

The average weekly wages for Goods Producing Sector Industries jobs are all higher than the average weekly wage for 71% of Services Sector Industries jobs.

Along with showing the general upward trend for average weekly wages over the long term, the following graph provides a quick understanding of the relationships between Goods and Services Producing Sector wages for Canada and Alberta as well as how Alberta’s wages compare to the Canadian overall average.

Data Source: Statistics Canada. Table – 14-10-0203-01   Average weekly earnings by industry, monthly, unadjusted for seasonality

Over the 16 -year period (01/2004 to 01/2019) Alberta’s average annual weekly wage change was 3.4% for the Goods Producing Sector and 3.87% for the Services Producing Sector, Canada’s annual average wage change was 2.57% (Goods) and 3.14% (Services).  Alberta’s average weekly wages are higher than the Canadian average weekly wage.

The Global Recession (2007 – 2010) impact on Canada as a whole is seen in the average weekly wages for Canada.  The impact of the 2014 oil and gas industry and resulting economic slowdown in Alberta are clearly visible in the drop in average weekly wage in 2016. While the Alberta Services Sector Industries have recovered slightly (+0.05%) as compared to the 2015 average, the Goods Sector average weekly wages remain lower as of January 2019.

Reduced numbers of highly paid senior staff, wage rollbacks, wage freezes and the completion of severance package payouts are among reasons why it took until 2016 for the impact of the recession to show up in the average weekly wage.

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Canada’s Labour Force Participation

Canada’s labour force includes everyone who is 15 years of age and older.  Labour force participants are individuals who are employed or on EI and are actively seeking employment.  The major factors affecting Labour Force participation are economic conditions, the proportion of the population that is between birth and 15 years of age and older.

Statistics Canada provides low, moderate and high growth estimates for Canada’s future population. In 2030 Canada’s 10.1 million Baby Boomers will be between 65 and 84 years old. Current estimates for Canada’s population in 2030 are a low of 38.6 million, moderate of 41 million and a high of 43.6 million people.  If we go with the moderate population growth number, in 2030 25% of the population will be 65 and older.

In the decade between 2008 and 2018, the proportion of the population between birth and 14 years of age has declined from 16.8% to 16.1% of the population. Over that period the overall population has grown by 11.2%, with the young growing by only 6.3% – less than half the rate of the rest of the population. Canada already has more people over the age of 65 than it does people younger than 15 and has a birth rate that is below replacement levels, which suggests that the Labour Force participation rate will continue to decline for at least the next decade.

There are several other challenges for workers and organizations resulting from the aging of the population. A topic for another blog in the next few weeks.

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Labour Force Information for August 2019


The August data was released September 6. Unemployment in Alberta is up 7.2% ( 7.0% July and 6.6% in June) for the third consecutive month and remains higher than it was last year over the summer months (2018 – August  6.7%, July 6.7%,  and June 6.5%).    It remains lower than it was between January 2016 and June 2017 when oil and gas industry downturn effects were greatest (Thankfully!!)

Alberta’s Labour Force has grown this year with 18.7 thousand more participants and 4.1 thousand more people employed.  The number of unemployed (on EI and actively looking for work) has increased by 14.6 thousand since last August.

Industries with the biggest losses of employment this year in August as compared to last year:

  1. Forestry, Fishing, Mining, Oil & Gas:  -11.6%
  2. Business, Building & Other Support Services: -6.5%
  3. Accommodation and Food Services: -4.4%

Industries with the largest employment gains as compared to last August were:

  1. Public Administration: +6.6%
  2. Health Care & Social Assistance: +4.9%
  3. Manufacturing: +4.6%
  4. Finance, Insurance, Real Estate & Leasing: +3.3%
  5. Professional, Scientific and Technical Services: +3.1%

Canada’s unemployment rate is 5.8%, down from 6.1% in August 2018.  Only New Brunswick and Alberta experienced increased provincial unemployment rates in August 2019.

Since last week when I posted a blog about some of Alberta’s July 2019 Labour Force data, another 5000 Canadian Baby Boomers have retired.  Those retirees do not affect the employment or unemployment rates – they affect the Labour Force Participation rates.  Alberta has the highest provincial participation rate at 71.5%.

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Labour Force Information

Every month the Federal and Provincial Governments provide information about the employment and unemployment statistics, average weekly wage, and job vacancies along with a variety of other economic data.

The monthly Labour Force Statistics provide month over month and year over year information along with a breakdown of employment by industry.

The July 2019 data release in early August tells us:

  • The overall unemployment rate is 7.0% and has increased by 0.3% since last July which is 12,300 more people actively looking for work in July than was the case last July.
  • It also tells us that a total of 177,600 people are actively looking for work which is an increase of 9,700 more people looking for work than there was in July 2018.
  • Calgary’s unemployment has gone down by just under 1%; Edmonton’s has gone up by 1%.

The good news is that employment is up this July over last July by 19,200 people. And the Canadian Federation of Independent Business indicates that Canada’s Job Vacancy Rate while not increasing is holding at 3.2% – roughly 429,000 unfilled jobs through the first half of this year.  It is highest in BC and Quebec and lowest in Alberta and Saskatchewan.  Alberta’s unfilled jobs are down, sitting at 1.9% of Labour Demand.


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Private Sector Job Openings

Statistics Canada released their Job Vacancy Change Survey for Q1 2019 as compared to Q1 2018 in June.

The Job Vacancy Rate is determined by the presence of three specific factors:

  1. There is a specific job;
  2. The work could start within 30 days, and;
  3. The employer is actively seeking employees from outside the company.

The Private Sector which employs roughly two-thirds of Canadians refers to organizations that are privately owned and Public Sector jobs refer to jobs that are “owned and operated by the government (public bodies or public authorities).

Job Vacancies were down in that period for Alberta – specifically in the following regions:

  • Red Deer (- 1,000 jobs)
  • Wood-Buffalo-Cold Lake (-500 jobs)
  • Camrose-Drumheller (-300 jobs)
  • Banff-Jasper-Rocky Mountain House and Athabasca-Grande Prairie-Peace River (-1000)

At the end of March 2019 Alberta’s Labour Force (18,900 people), Unemployment (15,600 people), and Employment (4,600 people) were up.  The gap between the Labour Force and the combination of unemployed and employed people (1300 people) is the number of people who are no longer included in the employed or unemployed groups.  They are people who are not on EI, not working,  or not working in the visible labour market.

Job Vacancy rates do not rise and fall consistently with Unemployment Rates. Unemployment can rise at the same time as Job Vacancies increase.  Job Vacancy Rates can also go up when employment numbers increase as more jobs are created and when new skills are required.

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Job Vacancies in Alberta

The Job Vacancy Rate is determined by the presence of three specific factors:

  1. There is a specific job;
  2. The work could start within 30 days, and;
  3. The employer is actively seeking employees from outside the company.

Statistics Canada maintains longer-term data on labour demand, job vacancies and the vacancy rate for Canada and the provinces.  The following table provides the total labour demand by year, with the green portion of the column showing met labour demand, the blue showing unmet (or vacant positions) demand, with the yellow showing the vacancy rate.


StatsCan Table 14-10-0225-01, Job Vacancies, Labour Demand and Job Vacancy Rate, Annual

In Canada overall and in every province, Job Vacancies are higher in skilled occupations than they are in semi or unskilled occupations.

Where are the Jobs?

The Goods Producing Sector employed 25.4% of the Alberta labour force and the Services Sector 74.6% in July 2019.

The Goods Producing Sector jobs include Agriculture, Forestry, Fishing, Mining, Oil & Gas, Utilities, Construction, and Manufacturing.

  • Agriculture and Manufacturing jobs are down from last month (a combined total of 500 jobs) and up from July of 2018 (1700 and 5900 respectively:
  • Forestry, Fishing, Mining, Oil & Gas are down from June 2019 (7200 jobs) and July last year (11,800 jobs)
  • Construction is up from last month (4,600 jobs) and down from last year (2200 jobs)
  • Utilities are up this year by 200 jobs, July over June, as well as (800 jobs) over July 2018

Overall, The Goods Producing Sector is down a total of 5700 jobs this July as compared to last July.

Employment in the Service Producing Sector is up by 24,900 jobs in July this year as compared to July 2018.

Only 3 of the 14 Service Sector Industries, (Educational Services, Information, Culture & Recreation, and Accommodation & Food Services) have lost jobsThe highest demand in the Services Sector is in the Personal Services industries, which includes things like daycare, accounting, counselling and rehabilitation, legal, laundry, auto repair, lawn maintenance, and funeral services.

Of those Service Sector Industries that lost jobs in July 2019, the one with the lowest average weekly earnings is the Accommodation & Food Services Industry which at January 2019 was $451.78 and is the lowest of all industries.


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