The employment storm of ’09 is on its way

The plight of the auto sector has dominated most of the discussion around central Canada’s worsening job market. And for good reason. Pummelled first by a rising loonie, and then by slumping car sales, the auto sector had already shed about 35,000 jobs since 2002. And the outlook remains grim. In its heyday, half of all cars and trucks sold in North America bore a GM brand name. Today it makes up just 20 per cent of the market. Even without a full collapse, analysts say, the Detroit automakers must keep cutting jobs. And that translates into even tougher times for parts suppliers like Magna International, which has failed to diversify away from the Detroit Three. In recent months the company shut several plants, letting go of hundreds of workers. The Conference Board of Canada says the auto parts industry shed 12,800 jobs in 2007, and predicts another 10,800 jobs will have been lost by the end of 2009.

Even the Japanese manufacturers Toyota and Honda, once hailed as bright spots in the auto sector, are starting to hurt. Just weeks after Toyota opened a new plant in Woodstock, Ont., in early December—a rare chance for politicians to cut ribbons—the company warned it would suffer its first annual operating loss. Analysts say it will be nearly impossible for Toyota to stick to its policy of zero layoffs if the recession deepens. The outlook is just as spotty for much of Central Canada’s manufacturing sector. Quebec’s low-skilled textile industry is likely to continue to suffer heavy job losses as work gets transferred overseas—even during the last five years of relatively good times, at least 3,000 textile jobs disappeared. Then last month Bombardier Recreational Products, the maker of Ski-Doo snowmobiles and Sea-Doos, terminated 1,000 jobs, the majority of them in Quebec. The outlook is better at Bombardier Inc.’s rail division, but for each sign of optimism, there’s another round of pink slips. Last month Babcock & Wilcox, a pipe maker in Cambridge, Ont., laid off 50 employees after a contract to supply one troubled oil sands project in Alberta was delayed. “The main message is that no province or industry is completely immune to the downturn of global growth,” says Porter.

Experts offer several tips to those who are worried about the security of their jobs, and they generally have to do with making yourself as indispensable as possible. For instance, Shatkin says workers need to make sure their higher-ups know what a good job they’re doing. (Others might call that sucking up to the boss.) With companies looking to cut costs, it’s also best not to be seen as being wasteful. And if you can, stick as close to your company’s core business as possible. During good times, businesses often bulk up by branching into other sectors. Those are often the first to go in a recession.

The problem is, many of the suggestions offered by career advisers don’t help much on a factory assembly line or in a labour-intensive job in the resource sector. But one thing all workers can think of doing is obtaining some extra skills. That could mean returning to school. Wayne Shillington, the president of NorQuest College in Edmonton, says his school typically sees a jump in enrolment during recessions as workers try to make themselves more employable. Of course, the best time to do that is before a recession actually hits, since it takes time to build up new skills. As Shatkin admits, “There are no easy answers for what you should do right now. In the short term, it’s tough.”

A lot depends on how deep, and how long the recession extends. In the 1980s, when a global slowdown hit all sectors of the economy, there were stories of Ph.D.s forced to pack groceries to make ends meet. During the 1990s recession, any manufacturer that said it was hiring would attract thousands of applicants who’d line up around the block just for a chance at an interview.

But even if the unemployment rate doesn’t reach into the double digits this time around, some economists worry the effect on the economy could be just as bad. That’s because the quality of jobs has been deteriorating for months now. “The unemployment rate is masking much more severe difficulties,” says Benjamin Tal, an economist with CIBC World Markets. “You have to look at not just the number of jobs being created, but also the quality of those jobs, and we’ve seen a significant decline over the last six months.” By that he means more and more workers are being forced to switch to part-time positions, or into “forced self-employment.” They earn a lower income, but don’t show up in the unemployment numbers. “You can make an argument that many of those self-employed people are actually unemployed, because they’re not making very much money.” And he expects job quality to continue to deteriorate for at least another six months.

Which means those hoping for a fast recovery are likely to be disappointed. With older workers delaying retirement, and hundreds of thousands of young workers and immigrants entering the labour force over the next two years, the days of multiple job offers and hardball salary negotiations are over.

For workers like 50-year-old Jaspal Brar, a line worker at Chrysler’s plant in Brampton, it’s a scary time. On Dec. 19 the company shut down all its plants in North America for one month. He doesn’t know what he’ll do if the layoffs at his plant become permanent. “The expectation and hope is that the company will survive and we’ll be able to get through this,” he says. But after a pause, he adds, “Sometimes it’s easier to just block the thought from your mind, because you don’t want to face reality.”

The reality is no one knows for certain how hard hit the Canadian job market will be during this recession. If the economists are right, the pain will be brief and the country will return to prosperity sometime later this year or early in 2010. But time and again during this crisis, early optimism about Canada’s resilience has proved misguided. So for those asking the question, “Is my job safe?” the answer will come soon enough. Fingers crossed, the news will be good.