Canadian women’s dilemma cuts growth

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Krystyna Recoskie, expecting her third child next month, says she’s done with full-time employment.

The 37-year-old wants to spend more time with her kids, so she’s cut back her hours to a couple of shifts a week as a cardiac sonographer at the Children’s Hospital of Eastern Ontario in Ottawa.

“Some people want to be at work, but I want to be there to pick up my kid from the bus stop,” she said.

“I just wish that some moms wouldn’t judge me and think that I am throwing away my career.”

The choices of people such as Recoskie may spell trouble for Canada and other economies with ageing workforces, which have been supported in recent decades by women who broke social barriers to join the labour market.

The long-term economic growth trend in Canada will slow because female participation in the workforce has probably crested, says Organisation for Economic Co-operation and Development (OECD) economist Peter Jarrett.

“We have been living off the fact that steadily more young women were entering” the labour force, said Jarrett, who covers Canada for the Paris-based OECD.

“That process looks very much to me like it’s over,” he said, calling the trend “disconcerting”.

The percentage of women ages 25 to 54 who are working or looking for work – the so-called participation rate – was 81.8 percent in April, down from 82.9 percent as recently as December 2012, according to the federal statistics agency.

 

Participation rates

While that share had risen from 52 percent in 1976 when Statistics Canada records began, it has been little changed for about a decade.

Female participation remains below the 90.3 percent level for men in the same age group, Statistics Canada figures show.

It also remains above the 73.9 percent rate for US women in the same age group.

Younger women were thinking differently about their career paths than prior generations did, economist Frances Woolley of Carleton University in Ottawa said.

The pursuit of higher education and a desire to balance work and family responsibilities, as well as changes in the way women and men divide household work, may be affecting how much younger women want to be in the paid work force.

“Women and men’s attitudes to the labour market are in many ways formed in their 20s and early 30s,” Woolley said.

“The younger cohort has a different attitude towards work than their mothers.

“People who are 22 now, they have grown up with moms who are in the labour market,” Woolley, 50, said.

“They don’t see how boring and economically vulnerable it is to be a stay-at-home mom, they see the stress and the challenges of balancing two careers.”

For Erica Ehm, a former broadcaster at Canada’s MuchMusic network who now runs YummyMummyClub.ca, a website about motherhood, achieving flexibility in the work world is key.

“Women are looking at the realities of what they are giving up by going into the workforce,” Ehm said, citing issues such as commuting time and the cost of daycare – which has risen 40 percent in the past decade according to Statistics Canada data, twice as fast as total inflation.

Ehm said she “chose to take control of my work life by being self-employed rather than having a full-time job which required me to show up at work on a strict schedule”.

She said she had structured her company to allow staff – mainly mothers – to do a lot of work from home.

“At least we’re not rushing to beat traffic for a long commute or racing to pick up our kids from school or daycare,” Ehm said.

Longer parental leaves help keep women more attached to the Canadian labour market than in the US, where the participation rate for core-age women, those aged 25 to 54, has been declining since 2008.

The leave policy, and a milder recession during the global financial crisis, meant Canada’s rate would stay above US levels, said Tammy Schirle, the associate economics professor at Wilfrid Laurier University in Ontario, who studies women and work.

“The Canadian labour market since 2008 has been very different than the US,” she said.

US female participation fell to 17th place in 2010 from sixth place in 1990 among 22 nations studied in a paper by Francine Blau and Lawrence Kahn of Cornell University in New York.

Canada was tied for ninth with the Netherlands.

The US government requires companies employing more than 50 people to offer 12 weeks of unpaid parental leave under a 1993 law.

Canada expanded paid benefits that can be claimed through the national unemployment insurance programme by either parent to a maximum of 104 weeks in 2010.

 

Stopped growing

While female Canadian participation rates are higher than in the US, they have stopped growing.

Years of women joining the work force in greater numbers meant that Canada kept adding to its supply of labour, and expanding its economic potential – the amount the economy can produce without sparking inflation.

With female participation stagnating, potential growth isn’t rising as quickly, which means the economy will hit its capacity limits sooner and the Bank of Canada will need to raise interest rates more quickly to keep inflation in check.

Canada’s central bank has said the potential growth will be 1.9 percent in 2016, down from about 3 percent in 2000.

The levelling off in participation by core-age female workers is exacerbating the impact of retiring baby boomers and a rise in youth unemployment since the last recession.

The total participation rate fell in April to the lowest since 2001 at 66.1 percent, down from a May 2008 peak of 67.8 percent.

“The economy won’t grow as quickly” as a result, Jarrett of the OECD said.

“It’s important people recognise these impacts for long-term planning.”

Female labour force participation could rise again, said Nora Spinks, the chief executive of the Vanier Institute of the Family, an Ottawa-based research group.

Men were spending more time on household chores that had been left to women, who in turn were boosting their enrollment in higher education, she said.

“It’s way too early to tell if it’s a trend peak or not,” she said, adding that the Vanier Institute was going on a national “listening tour” in summer to learn more about the issue.

Schirle, the economics professor, agreed female participation could recover in Canada.

She cited a period where it had levelled off in the 1990s only to rise again, defying forecasts at the time.

“It depends a lot on policy and how young women approach their careers over the next 10 to 15 years,” she said.

“You are looking at changing education levels, delayed marriage, delayed time for having your first child, what is going on with men in their labour markets, what are you doing with couples and organising their households.”

A 2011 study by Statistics Canada showed a narrowing gap between men and women in terms of the time they spent on unpaid housework.

In 1986, Canadian women spent on average 54 more minutes than men a day doing unpaid housework.

In 2010, the study showed that gap had shrunk to 20 minutes.

Ways to boost labour supply include better child-care programmes designed to encourage women to work more, according to Ehm and Spinks.

Encouraging higher youth participation and delayed retirement for older workers were other possible offsets, Jarrett said.

Women struggling to balance work and family life would have to look for innovative solutions, Ehm said.

Companies will also have to become more flexible in human resource (HR) policies if they want to keep working mothers and fathers who put family first.

“More and more companies are going to have to change the way that their HR works to compel women to stay in the rat race,” she said. “Smart companies, if they play their cards right, will keep the best people.”

Recoskie, the cardiac sonographer, says she’s just happy her husband’s salary is enough to allow her to choose a reduced work schedule.

“I still would not put my children in full-time daycare,” she said. “Being home two days a week will help,” she said.

“Having three boys, I know it’s going to be a zoo.” – Greg Quinn from Bloomberg



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