New immigrants most affected by job disruptions due to pandemic

Published on August 27th, 2020 at 08:00am EDT

The pandemic has led to a decline in employment for a large part of the Canadian population, but even more so for recent immigrants.

During the sharp economic downturn in March and April 2020, the Canadian labour market lost 3 million jobs. From May to July, as activity picked up, 1.7 million jobs were regained.

According to a Statistics Canada Labour Force Survey released on August 20, recent immigrants were more likely than the Canadian-born to lose their jobs in March and April. When the pandemic hit, the transition to unemployment increased for all three groups included in the study: immigrants who had arrived in Canada within the last 10 years, immigrants who had arrived in Canada more than 10 years ago, and those born in Canada.

However, the increase in the rate of people who transitioned to unemployment was much more significant for recent immigrants, reaching a peak of 17.3% compared to 13.5% for the Canadian-born and long-term immigrants during the month of April.

Recent immigrant women experienced the largest increase in the rate of transition to unemployment during the economic downturn. Nearly 20% of recent immigrant women employed in March did not have a job in April, compared to 13% of Canadian-born women. This gap narrowed to only 2 percentage points in June and virtually disappeared during July.

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Factors contributing to higher transition rates to unemployment among recent immigrants

Recent immigrants may find it more difficult to transfer their educational and occupational qualifications to the Canadian labour market and to find stable, well-paying jobs. As a result, a larger share of recent immigrants works in lower-paying jobs, short-term jobs and jobs in accommodation and food services.

In February, for example, before the impact of the pandemic, 31% of recent immigrants had been employed for less than a year, compared to 15% of Canadian-born workers. Similarly, in February, 22% of recent immigrants were employed in low-paying jobs, compared to 12% of Canadian-born workers.

The data show that recent immigrants tend to have jobs of shorter duration than their Canadian-born counterparts and that workers with short-term jobs are more likely to be laid off during an economic downturn. The fact that job losses in March and April were heavily concentrated in lower-paying jobs helps to explain why recent immigrants were harder hit by job loss during this period than their Canadian-born counterparts.

Employment in low-paying jobs grew more slowly among recent immigrant women during the period of partial economic recovery

According to the survey, from February 2019 to April 2020, all three groups experienced similar transition-to-work rates, with recent immigrants even recording slightly higher rates than the Canadian-born in most months.

However, during the partial recovery period and as the transition to employment began to improve, recent immigrants had lower transition rates than the Canadian-born in May (5%), June (3%) and July (1%). Recent immigrant women had the largest difference with their Canadian-born counterparts, especially in May and June (5%), with a slight improvement in July (2%).

For recent immigrant women, these differences with Canadian-born women became even more pronounced when taking into account factors such as age, education and geographic location. From April to July, recent immigrant women lagged behind Canadian-born women in terms of employment growth in accommodation and food services (4% compared to 72%), although they experienced similar employment growth rates in other important industries.

At the same time, employment in low-paying jobs grew much more slowly (11%) for recent immigrant women than for Canadian-born women (36%), while their rate of growth in high-paying jobs was comparable.

Canadian labour market recovery is strong

Data released in July and August by Statistics Canada show that the initial recovery of employment in Canada since the restrictions were lifted has been stronger than in previous economic downturns.

According to a recent Labour Force Survey, about 55% of the 3 million jobs lost since April have been recovered as of July.

Some 419,000 jobs were added in July, an increase of 2.4% over the previous month. This follows a 5.8% growth rate in June. Results from Statistics Canada’s recent surveys of employment, payroll and hours of work show that the economic slowdown due to the coronavirus is bouncing back strongly after a significant decline in previous months.

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