Time on the job: Intensity and Ontario’s prosperity gap
In its ninth Working Paper, the Institute finds that Ontario workers are on the job about three and half fewer weeks annually than their counterparts in US peer states and this is costing $3,700 per capita in lower prosperity.
Drawing on data from Statistics Canada, US statistical agencies, and Mercer Human Resource Consulting, the Institute has been able to deepen our understanding of the hours worked gap between Ontario and its US peers. Half of the hours worked gap is the result of Ontario workers taking more full weeks off than their US counterparts, including nearly an extra week of vacation annually. The other half is that the average work week of Ontario workers is about one and a half hours shorter than in the US.
But that doesn’t mean all workers have a shorter work week than their US counterparts. In fact for two thirds of workers, the Ontario-peer state difference in the hours they actually work in a week is negligible. The real difference is at the two extremes. More of Ontario’s workers are part-time and many of them are doing so because they can’t find full-time work. Involuntary part-time affects workers with less education and skills and this points to the importance of investing in education in Ontario. What’s worrisome is that the gap attributable to part-time work has increased over time. Our higher unemployment and our lower competitiveness relative to the peer states mean fewer opportunities for full-time work – and the result is fewer hours worked by Ontarians overall.
The other key contributor to shorter average work weeks is the fact that fewer of our workers put in long work weeks (defined as 50 or more hours per week). Managers and professionals tend more to work long weeks both sides of the border. But among the most highly educated and highest income workers, fewer Ontarians work long work weeks compared to their peer state counterparts.
The Institute also points out that hours on the job will become an increasingly important issue for Ontario’s economy. With the baby boom generation approaching retirement, there will be fewer workers available to build economic prosperity. Smart employers will need creative human resources policies to ensure that critical skills are not lost because of outdated approaches to retirement.