The easing of COVID-19 restrictions is reflected in June payroll employment

The number of employees receiving pay or benefits from their employer, measured in the Survey of Employment, Payrolls and Hours (SEPH) as payroll employment, rose by 666,500 (+4.9%) in June. This followed three consecutive months of declines and brought the total payroll employment change since February to a decrease of 2.7 million (-15.7%). SEPH payroll employment rose in every province in June, with the largest increases in Ontario (+231,500, or +4.4%), Quebec (+189,000, or +6.1%) and British Columbia (+97,200, or +5.1%). 

All of the June employment increase is accounted for by hourly paid employees

From February to May, payroll employment declined by about 3.3 million. Three-quarters (76.4%) of this decline was among hourly paid employees, who represented less than 60% of all payroll employees in 2019, and who tend to earn significantly less than salaried employees. In February 2020, for example, salaried employees earned an average of $1,410 per week, while hourly paid employees earned an average of $800 per week.

In June, all of the payroll employment increase was among hourly paid employees, whose employment rose by 646,800 (+8.9%). Despite these gains, the number of hourly paid employees was 18.9% below its pre-COVID-19 level. In comparison, the number of salaried employees was little changed from May and was 7.5% below its pre-COVID-19 level.

Average weekly earnings decline as payroll employment increases for lower-paid workers

In June, total weekly payroll (including overtime) for all employees rose for the first time since February, up 3.4% compared with May. This brought the total weekly payroll to 9.3% below its pre-COVID-19 level.

Average weekly earnings declined 1.8% to $1,119 in June, as employment increased significantly in sectors with relatively low average weekly earnings. Despite the monthly decline, earnings were up 9.4% compared with June 2019, as lower-paid workers were harder hit by employment declines during the COVID-19 economic shutdown.

Total hours worked rise while average hours worked per week decline

Month over month, total hours worked increased 3.8% in June, but remained 13.5% lower than in February. In June, average weekly hours worked decreased 0.9% (-0.3 hours), bringing the average to 33.8 hours per week, compared with 34.1 hours in May. However, this was still higher than in February, when payroll employees worked an average of 33.0 hours per week.

Employment levels rise most in retail trade and in accommodation and food services

In June payroll employment rose the most in retail trade (+151,700, or +9.7%) and accommodation and food services (+133,600, or +23.2%), the two sectors hardest hit by job losses during the COVID-19 economic shutdown. According to a new experimental series on monthly business openings and closures released on August 5, the number of business closures in these sectors in April 2020 was more than double what it was in April 2019.

In June, payroll employment gains in retail trade were largest among clothing and clothing accessories stores (+41,900, or +41.4%) and motor vehicle and parts dealers (+28,200, or +18.3%). Despite recording the largest increase in June, the number of payroll jobs in clothing and clothing accessories stores was down 36.6% compared with February. Some retail trade subsectors were closer to their pre-COVID-19 level, including general merchandise stores, where payroll employment in June was down 1.9% from its February level. Overall, as reported in the retail trade release, retail sales rose by 23.7% in June and surpassed the February level by 1.3%. Meanwhile, average weekly earnings in retail trade increased by 8.0% year over year to $664 in June.

Faster payroll employment recovery in the goods-producing sector

While payroll employment levels increased the most in services-producing sectors month over month, they rose at a faster pace in relative terms in the goods-producing sector. Following a small increase of 0.5% in May, payroll employment in the goods-producing sector rose 6.2% (+153,900) in June, bringing employment to 11.3% below the February level. In the services-producing sector, the number of jobs grew by 4.5% (+489,800) in June, bringing employment to 16.6% below its pre-COVID-19 level.

Looking ahead

According to Canadian Survey on Business Conditions: Impact of COVID-19 on businesses in Canada, nearly two-thirds of businesses surveyed through the month of June expected their number of employees to remain the same over the next three months. A little less than one in six expected their number of employees to increase over the same period. 

Source: Statistics Canada