Summary
Ontario’s labour market went through a period of rapid changes between 2019 and 2022. The global pandemic that shut down much of the province’s economy drove the unemployment rate to 14 per cent by May 2020. Not long after, in 2021 and 2022, a rapid recovery pushed the unemployment rate back down to 5.3 per cent in December 2022. Rising wages and increased job vacancy rates were clear signs of tight labour markets as 2022 came to a close.
The tide rose, but it didn’t lift up everyone: There was a shift in the industrial structure of employment in the province. Between 2019 and 2022, 10 out of 17 major industries saw employment gains; seven saw employment losses. Much of the shift in employment was from low-wage industries into high-wage industries. However, this report shows that a rising tide did not lift all boats: While the employment and wage gap between racialized and white workers has narrowed during the pandemic recovery, Black workers, in particular, are still encountering barriers in Ontario’s labour market.
Employment gap widened for Black workers: As the recovery took hold, the total racialized population narrowed the employment gap with white workers, but the gap widened for Black workers. In 2022, the unemployment rate fell by 2.9 percentage points for all racialized workers and by 2.1 percentage points for white workers but unemployment fell by only 1.6 percentage points for Black workers. Positive signs for the total racialized workforce are not in evidence for Black workers: the gap between Black and white workers has widened. Black men’s employment continues to be concentrated in lower-wage industries and in industries that have experienced employment losses since 2019. Black women have the smallest share of their employment in occupations with the fastest wage growth.
Racialized men, as a whole, got jobs in fast-growing industries: For racialized men, much of their employment growth was in fast-growing industries. Thirty-one per cent of racialized men worked in the three fastest-growing industries, compared to 23 per cent of Black men and 25 per cent of white men. The large share of South Asian and Chinese workers in professional, scientific and technical industries, along with finance, insurance and real estate, account for much of the high share of racialized workers in these high-growth industries. Racialized men not only worked disproportionately in high-employment growth occupations, they also worked in high-wage growth occupations. Thirty-nine per cent of racialized men worked in the three occupations with the fastest wage growth, compared to 27 per cent of Black men and 34 per cent of white men. Those occupations account for 21 per cent of racialized women’s employment, 13 per cent of Black women’s employment and 16 per cent of white women’s employment. The concentration of South Asian and Chinese men in natural and applied sciences accounted for racialized men’s larger share of employment in these higher-wage growth occupations. In contrast, there is a lower concentration of women in high-wage growth occupations and a lower concentration of both Black men and women in these occupations.
Two different labour markets for racialized workers: Overall, South Asian and Chinese workers are more likely to be employed in industries and occupations with faster employment growth and higher wages than other workers. However, there are signs of a bifurcated labour market for racialized workers. When it comes to wages, they are over-represented both in high-wage occupations and low-wage occupations: 52 per cent of racialized workers are in the bottom 50 per cent of occupations, as are 60 per cent of Black workers and 48 per cent of white workers.
The racialized and gendered gap continues: Racialized and Black workers continue to have higher unemployment rates and lower employment rates than white workers. Earnings of racialized and Black workers continue to lag those of white workers. In 2022, on a weekly basis, racialized men earned 90 cents for every dollar that white men earned while Black men earned 77 cents for every dollar that white men earned. Racialized women earned 71 cents for every dollar that white men earned, Black women earned 68 cents for every dollar that white men earned, and white women earned 80 cents for every dollar that white men earned.
The provincial government’s wage restraint legislation, Bill 124, is having a disproportionate impact on racialized women, who are over-represented in health care and social assistance occupations. The bill resulted in lower than average wage increases across the provincial public sector. Further policy interventions are needed to address the continued gaps in labour market outcomes for much of the racialized labour force, and for Black workers, in particular. The first, and most obvious step, would be for the Ontario government to repeal Bill 124 and to raise the minimum wage for the lowest-paid workers in the province.
Introduction
Ontario’s labour market went through a period of rapid shifts between 2019 and 2022. Pandemic shutdowns in 2020 saw the unemployment rate peak at 14 per cent in May 2020. A rapid recovery in the job market in late 2021 and 2022 drove the unemployment rate down to 5.3 per cent by December 2022. The evidence of tighter labour markets included both rising wages and elevated vacancy rates. While job vacancy rates in the fourth quarter of 2022 had retreated from their peak in the second quarter of 2022, when the economy was still re-opening, they remained 60 per cent higher than they had been in the fourth quarter of 2019.
The period from 2019 to 2022 also saw a shift in the industrial structure employment. Ten out of 17 major industrial groups experienced employment gains over this period; the remaining seven saw employment levels in 2022 fall below their 2019 levels. Much of this shift in employment occurred in lower-wage industries, like accommodation and food services, into higher-wage industries, like professional, scientific and technical services.
This paper starts with an overview of the changes in Ontario’s labour market since 2019. It uses recently available data from Statistics Canada’s Labour Force Survey (LFS) on racialized workers to understand the impact of these labour market changes on the racialized workforce. Did improved labour market conditions benefit all workers equally? In this paper, we analyze the impact of tighter labour market conditions on racialized workers in Ontario, with a focus on Black workers, in particular. Working within the constraints of the data, we compare labour market outcomes, by gender, for all racialized workers, including Black workers, and outcomes for Black workers compared to white workers. We then compare the 2022 distribution of racialized and Black workers in high-growth industries, in high-wage occupations, and in occupations that have had high wage growth. Finally, we compare average weekly earnings by gender for these population groups.
A pandemic shutdown and recovery
Ontario’s labour market from 2019 to 2022
The period since 2019 has seen rapid changes in labour markets in Ontario and in Canada. In 2020 and well into 2021, public health measures shut down large parts of the economy; the second half of 2021 and the first half of 2022 saw a rapid recovery as pandemic measures were lifted.
Layoffs resulting from the public health closures in 2020 and 2021 fell hardest upon low-income workers. Nationally, in the first months of the pandemic, 52 per cent of workers earning $14 an hour or less were laid off or lost all of their hours of employment compared to only one per cent of those in the top earning bracket, who made $48 an hour or more. Young and marginalized workers bore the brunt of these layoffs. In April 2020, 43 per cent of youth had lost their job or most of their working hours.1 Rates of employment loss were also high among recent immigrants, a large majority of whom are racialized:2 38 per cent of recent immigrants who were employed in February 2020 had lost their job or the majority of their working hours by the end of April 2020—eight percentage points above the losses experienced by Canadian-born workers.3 While there is limited data available about the labour market experience of racialized workers during the pandemic, for the period that racialized labour force data was available, racialized women and youth saw a sharp increase in unemployment rates compared to their white counterparts.4
The shift in the labour market in the second half of 2021 and 2022 was almost as dramatic. The Ontario average annual unemployment rate was 5.6 per cent in 2019; it rose to 9.8 per cent in 2020, fell back to 8.1 per cent in 2021, and then returned to the 5.6 per cent level in 2022. From a peak of 14 per cent in May 2020, the unemployment rate trended down until it reached 5.3 per cent in December 2022.
The labour force participation rate dropped by 1.6 percentage points, from 65.3 per cent in 2019 to 63.7 per cent in 2020, but by 2022, it was slightly above the 2019 level, at 65.4 per cent. Similarly, the employment/population ratio dropped by 4.1 percentage points between 2019 and 2020, from 61.6 per cent to 57.5 per cent, and recovered to 61.8 per cent in 2022, above its 2019 level.
An uneven employment recovery
The 2022 return to 2019 unemployment and employment rates masks two large changes in the labour market. First, there was a shift in the industrial and occupational structure of employment; second, there was a markedly tighter labour market, characterized by a surge in vacancy rates.
Table 2 shows the shifts in the industrial structure of employment between 2019 and 2022. Ten out of the 17 major industries have employment levels that are higher than they were in 2019 while seven have employment levels that are lower. Professional, scientific and technical services had the largest increase in employment, at 18 per cent, with an increase of 78,000 jobs. At the other end of the spectrum, accommodation and food services employment levels in 2022 remained 45,000 jobs below the 2019 level, just 91 per cent of pre-pandemic levels. This shift in employment was largely out of lower-wage industries like accommodation and food services and into higher wage industries; this was likely a net benefit to workers.
Vacancy rates remained high at the end of 2022
While job vacancy rates in the fourth quarter of 2022 had retreated from their peak in the second quarter of 2022, when the economy was still re-opening, they remained 60 per cent higher than they had been in the fourth quarter of 2019. Looking at vacancy rates by industry in the fourth quarter of 2022, the highest rates were concentrated in a mix of lower-wage industries, like accommodation and food services, as well as higher-wage industries, like health care and construction.
The mass layoffs in the private sector during the pandemic saw a widespread severing of workers’ ties to their employer. CCPA research suggests that CERB payments provided an opportunity to workers to access retraining and extend their job search.5 This would have supported transitions into higher-paid and higher-skilled occupations and industries and might contribute to continued elevated vacancy rates in accommodation and food services and other low-wage industries.
Wages rose, but not uniformly—and not in every occupation
The combination of shifts in the structure of employment, higher vacancy rates, and elevated inflation resulted in higher wage increases in 2022. The average hourly wage rate increased by 4.2 per cent in 2022, which was almost twice the 2.2 per cent average annual increase from 2011 to 2019 (the period since the Great Recession). Table 4 shows average wage increases varied widely by occupation. These ranged from a high of 6.2 per cent for natural and applied science occupations down to 1.7 per cent for sales and service occupations. However, these wage increases did not keep up with increases in the consumer price index, which was 6.8 per cent for Ontario in 2022.
Bill 124 had a disproportionate impact on low-wage racialized women
Table 3 shows high vacancy rates in health care and social assistance extended into 2022. The data on vacancies by occupation provide a more detailed and nuanced picture of where these vacancies exist. Table 5 shows the occupations with the largest increases in vacancy rates between the fourth quarter of 2019 and the fourth quarter of 2022. These occupations have two things in common: Bill 124 is repressing wage increases in these occupations6 and racialized women are over-represented in them. Workers in all of these occupations had sharply lower than average wage increases over the period 2019 to 2022.
The 2021 census data is available for employment by detailed occupation by racialized group and gender. Table 5 shows that the five occupations with the highest vacancy rates are ones in which racialized women are over-represented. For example, Black women make up 15 per cent of nurse aide, orderlies and patient services associates while they make up only three per cent of total employment. All racialized women make up 36 per cent of social and community service workers but account for only 17 per cent of total employment. The data suggests that Bill 124 had a disproportionate impact on low-wage racialized women and that high vacancy rates in these occupations are a combination of the impact of Bill 124 on remuneration and the well-documented impact of the pandemic on the health care and social services workforce.
The recovery for racialized workers
Growing pains: new LFS data on racialized workers is useful but limited
In the spring of 2020, Statistics Canada began, for the first time, to collect Labour Force Survey (LFS) data for racialized workers. For the first 18 months, from July 2020 to December 2021, this data was collected for the population from 15 to 69 years of age through a supplement to the main survey.7 Starting in January 2022, these estimates were moved to the main survey.
As a result, estimates for racialized groups for the earlier period are not directly comparable to those for 2022 and beyond. This is because the LFS supplement covered only five-sixths of the LFS sample, the LFS supplement only included workers aged 15 to 69, and improvements were made to data collection methodology with the move to the main survey.
While the move to collect data on racialized workers’ labour market experience and the shift from the supplement to the main survey are very positive, there remain serious limitations on our ability to describe and better understand the historical labour market experience of racialized workers and to sustain meaningful comparisons over time because the data collection began in July 2020 and the shift in data collection methods occurred between 2021 and 2022. As a result of these limitations, we do not have 2019 data for racialized workers that would establish a pre-pandemic baseline. More importantly, we cannot compare levels of employment, unemployment or wage growth between 2021 and 2022 in this paper. Instead, we examine changes in employment, unemployment and participation rates over those two years. We focus on the data from 2022, which represents a key limitation on the analysis in this paper.
Despite these limitations, we feel these data are still useful to help us understand the evolution of the racialized labour market under these shifting conditions. It also helps us outline some key emerging developments in the experience of particular racialized groups.
Unemployment gap widens for Black workers, shrinks for all racialized workers
The impacts of racialization in the labour market are neither static nor generic. They shift with changes in policy, with changes in labour market conditions, and with changes in the make up of the racialized population. In an earlier paper, we found that racialized workers, especially Black women, benefited from the increase in the Ontario minimum wage in 2018, as a result of the gendered and racialized nature of low-wage work.8 An intersectional analysis is also warranted here.
Table 5 shows labour force data for all racialized workers (which includes Black workers), Black workers, and white workers in 2021 and 2022. It shows that racialized workers continue to have higher unemployment rates and lower employment rates than white workers. But it also shows that Black workers have higher unemployment rates than the racialized population as a whole. There is also a gendered difference in the data: while white women have slightly lower unemployment rates than white men, racialized and Black women have higher unemployment rates than men. Men continue to have higher employment and participation rates across all racialized groups.
As the recovery took hold, the strengthening labour market had an uneven impact. While the total racialized population narrowed the gap with the white population, the gap for Black workers widened. The unemployment rate fell for all groups of workers in 2022: by 2.9 percentage points for all racialized workers, by 1.6 percentage points for Black workers, and by 2.1 percentage points for white workers. Similarly, the largest increase in the employment rate was for racialized workers, at 3.1 percentage points, followed by white workers, up 2.3 percentage points, and Black workers, up 1.2 percentage points.
Looking at the data by gender shows that the labour market experience of women drove the improvement for all racialized workers as well as the widening gap for Black workers. Racialized women had a sharper recovery in their employment rate than any other population, while Black women’s recovery was the slowest. It is worth noting that Black women’s participation rates were the only ones that decreased over this period.
Black men had lowest share of employment in high-growth industries
The remainder of this analysis focuses on the population between 25-64 years of age. A development worth noting relates to the fact that there was a noticeable divergence in the performance of racialized men and Black men during this period. Table 7 shows the 2022 share of total employment ranked by industry growth rate for all racialized, Black and white men and women. The three industries with the fastest employment growth between 2019 and 2022 were: public administration, professional, scientific and technical services, and finance, insurance, real estate, rental and leasing. Table 7 shows that 31 per cent of racialized men worked in these industries, compared to 23 per cent of Black men and 25 per cent of white men. Those industries account for 28 per cent of racialized women’s employment, 27 per cent of Black women’s employment, and 26 per cent of white women’s employment. The large share of South Asian and Chinese workers in professional, scientific and technical industries, along with finance, insurance and real estate, account for much of the high share of racialized workers in these high growth industries. However, there is also a gendered difference in that Black women’s work is more concentrated in finance, insurance and real estate than Black men’s.
Black men had largest share of employment in industries that lost jobs
The four industries with reductions in employment over that period were: transportation and warehousing, business building and other support services, accommodation and food services, and other services. They account for 16 per cent of white men’s employment, 24 per cent of Black men’s employment, and 21 per cent of racialized men’s employment. These industries account for 16 per cent of racialized women’s employment, 14 per cent of Black women’s employment and 13 per cent of white women’s employment. The greater concentration of men in industries that have lost jobs is likely due to their concentration in transportation and warehousing, which is a more male-dominated industry. The lower share of women in the industries with job losses is due, in part, to the focus on prime-age workers in this analysis and the age distribution of workers in accommodation and food services. While 56 per cent of the accommodation and food services workforce in Ontario is female, 42 per cent are youth, aged 15-24, and are excluded from this analysis.9
Racialized men had largest share of employment in high-wage growth occupations
Table 8 shows the 2022 share of employment by major occupational category ranked by hourly wage growth between 2021 and 2022. It shows that the occupational category with the highest wage growth was natural and applied sciences, followed by occupations in manufacturing and utilities, and then by management occupations. Table 8 shows that 39 per cent of racialized men worked in these occupations, compared to 27 per cent of Black men and 34 per cent of white men. Those occupations account for 21 per cent of racialized women’s employment, 13 per cent of Black women’s employment, and 16 per cent of white women’s employment. The concentration of South Asian and Chinese men in natural and applied sciences accounted for their larger share of employment in these higher-wage growth occupations. In contrast, there is a lower concentration of women in high-wage growth occupations and a lower concentration of both Black men and women in these occupations.
Women’s employment concentrated in occupations with lowest wage growth
There was another observable distinction relating to a gendered wage gap within this time period. The occupations with the lowest wage growth were in education, law, social and government services, sales and service and art, culture, recreation and sport. Table 8 shows that 24 per cent of racialized men worked in these occupations, as did 30 per cent of Black men, and 25 per cent of white men. Those low-wage growth occupations accounted for 38 per cent of racialized women’s employment, 38 per cent of Black women’s employment, and 41 per cent of white women’s employment.
These broad occupational categories mask some of the differences in occupational distribution along racial and gender lines. Data limitations prevent us from obtaining 2022 data on employment by detailed occupation by both racialized group and gender, but it is available by racialization.
Racialized and Black workers over-represented in low-wage occupations
The racialized contours of occupational distribution in the Ontario economy still held firm. Appendix Table 1 shows the detailed occupational distribution of racialized, Black and white workers in 2022 ranked by hourly wage rates. Looking at the highest-paid occupations (those in the top 25 per cent of the distribution), 39 per cent of racialized workers worked in these occupations compared to 32 per cent of Black workers and 37 per cent of white workers. Looking at the lowest-paid occupations (those in the bottom 25 per cent of the distribution), 20 per cent of racialized workers worked in these occupations compared to 26 per cent of Black workers and 16 per cent of white workers. This suggests that there is a bifurcated labour market for racialized workers, with a larger share of these workers in both the top 25 per cent and the bottom 25 per cent of the occupational hierarchy compared to those of white workers.
Dividing the wage distribution in half (top vs. bottom), we find that racialized and Black workers, at 52 per cent and 60 per cent respectively, are over-represented in low-wage industries compared to white workers who, at 48 per cent, are under-represented in these industries.
Comparison of average weekly earnings
The best measure of racial and gender discrimination in the labour market is a comparison of average annual income. In addition to capturing occupational and industrial segregation, average annual income also captures access to hours of work and employment over the course of the year.
However, data on average annual earnings by racialized group is only publicly available from the census, not the Labour Force Survey. The 2021 census income data was for 2020. Three-quarters of that year marked the start of the pandemic, when economic shut downs had a disproportionate impact on racialized workers. In 2021 census data, the racialized wage gap shrank by 10 percentage points compared to the 2016 census. We cannot know how much of that might have been because of longer-term trends and how much was due to the impact of the pandemic on the labour market. Similarly, the available Canadian Income Survey is for 2021, when the impact of the pandemic shut downs was still being felt, and racialized data is more limited.
Despite the limitations, it’s still important to use and track data on the gendered and racialized wage gap. Table 9 compares average weekly earnings by racialized group and gender.
These data show that in 2022, on a weekly basis, racialized men earned 90 cents for every dollar that white men earned while Black men earned 77 cents for every dollar that white men earned. Racialized women earned 71 cents for every dollar white men earned, Black women earned 68 cents for every dollar white men earned, while white women earned 80 cents for every dollar white men earned.
Conclusion
By the end of 2022, labour market conditions in Ontario had markedly improved: unemployment was down, employment had shifted to higher-wage occupations and industries, and wage increases had accelerated. The data shows that the benefits of these improved labour market conditions varied by racialization and gender. As well, there were observable variations even within these categories.
There were positive signs in the data about the impact of changes in the labour market in outcomes for racialized workers. Looking at the racialized population as whole, in 2022, the gap in labour market outcomes between racialized and white workers improved: the unemployment and employment rate gap between racialized and white workers is smaller. The concentration of South Asian and Chinese workers in industries and occupations that have seen both above-average increases in employment and earnings has contributed to the narrowing of that gap.
However, in looking at disaggregated data, the gap between Black and white workers has widened. Black men’s employment continues to be concentrated in lower-wage industries and those that have seen employment losses since 2019. Also, Black women have the smallest share of their employment in occupations with the fastest wage growth.
Inequalities, of course, remain entrenched in Ontario’s labour market. At the same time as racialized workers are over-represented in higher-wage industries, they are also over-represented in the bottom 25 per cent of occupations. This suggests that there is a bifurcated labour market for racialized workers, with a larger share of these workers in both the top 25 per cent and the bottom 25 per cent of the occupational hierarchy compared to those of white workers.
These rapid shifts in labour market outcomes did not change two fundamental aspects of racialized workers’ labour market experience in Ontario: First, racialized and Black workers continue to have higher unemployment rates and lower employment rates than white workers, and second, earnings of racialized and Black workers continue to lag those of white workers. These data show that in 2022, on a weekly basis, racialized men earned 90 cents for every dollar that white men earned while Black men earned 77 cents. Racialized women earned 71 cents for every dollar that white men earned, Black women earned 68 cents for every dollar that white men earned, and white women earned 80 cents for every dollar that white men earned.
These data, once again, confirm that a rising tide does not lift all boats. Clearly, further policy interventions are needed to address the continued gaps in labour market outcomes for much of the racialized labour force, and for Black workers, in particular.
