Rethinking the Value of Service Work

Economic development practice in many communities across Ontario and Canada has shifted from a focus on investment attraction and deal-making to business retention & expansion and entrepreneurship development. Employment figures reflect this shift; as of September 2010, 79.9% of Ontario’s labour force is employed in service-producing industries – up from 69% in 1988. As these trends continue, local economies will be driven less by the production and export of commodities, and more by the local production and delivery of services – from international call centres to retail cashiers and bank tellers. Indeed, despite much talk about the importance of the creative economy for economic growth, the service economy is where the workers are.

From a labour force planning perspective, this creates many challenges. For one, a definition of ‘service’ jobs can range anywhere from professional consulting to janitorial work. However, by and large, service work is often low-quality and underpaid. A report prepared by the Toronto Workforce Innovation Group, which distinguishes between ‘entry’ level (requiring little education and no experience) and ‘middle’ level service jobs (which require several years of workplace experience), underscores these trends. It notes that, in Ontario in 2006, entry-level service jobs accounted for over 30% of all jobs in the economy yet are the lowest-paid in the province. Middle-level service workers, which only account for 12% of the economy and include positions such as chefs and bookkeepers, make up to $19,000 more on average than entry-level workers.

The question for communities then becomes: how do we respond to these trends in a way that provides secure employment and local economic growth? A recent report from the Martin Prosperity Institute at the University of Toronto attempts to answer these questions in the context of the City of Toronto. It notes that a large share of its service workers are educated and multi-lingual; many of their jobs are tied to the local economy, including public service delivery, transportation, food handling, and accommodation; and much of their work is done in support of higher-order, complex products or services. With a focus on recognizing, accrediting, and professionalizing service work, the report suggests that Toronto and communities like it can in fact create a jurisdictional advantage based on the quality and knowledge of their service professionals.

As the service economy continues to grow, a focus on providing better quality – and better paid – service work can provide new local employment options, as well as assist in youth retention, for communities across the country. However, this will require a new focus on recognizing the contribution of service work to the local economy. Jurisdictions that can successfully create training programs and pathways into better-paying, sustainable service careers will have a real advantage in the evolving economy.