In our previous piece COVID-19 and Joblessness: A Firm Perspective, we argued that the structural differences between large and small firms, especially in how they make strategic decisions and in their access (or lack thereof) to resources, impacts how they can respond to the economic shocks caused by COVID-19. Using the April Labour Force Survey data, we re-examined the labour force dynamics across firm types. We have two main takeaways:
- The economic crisis continues to disproportionately affect workers at smaller firms, which is consistent with what we saw in March. This further indicates that support policies must acknowledge these differences in order to target their support in the areas that different firms need. A targeted approach will help to limit short-run disruption and secure long-term economic competitiveness.
- We also saw a convergence in the types of industries that experienced disruptions. In March, non-knowledge service industries, such as Retail Trade and Food & Accommodation were most affected and in April, Construction and Manufacturing industries reported a large number of lay-offs. It is important to note that larger firms in the knowledge economy saw little disruption in both March and April. This may indicate their ability to leverage digital technologies to adapt both their workplace and business to a virtual environment.
The April Labour Force survey was collected for the reference week of April 12 to April 18, a week when appropriate public health responses related to COVID-19 crisis were adopted in most places across the country, resulting in disruptions to work. By this point, the first set of applications to the Canadian Emergency Response Benefits had been approved and on April 12, the legislation that formally created the Canadian Emergency Wage Subsidies program received royal ascent (though it would be 4 weeks until the program would be in operation).