Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • Help us build a better Ontario September 14, 2017
    If you live in Ontario, you may have recently been selected to receive our 2017 grassroots poll on vital issues affecting the province. Your answers to these and other essential questions will help us decide what issues to focus on as we head towards the June 2018 election in Ontario. For decades, the CCPA has […]
    Canadian Centre for Policy Alternatives
  • Does the Site C dam make economic sense for BC? August 31, 2017
    Today CCPC-BC senior economist Marc Lee submitted an analysis to the BC Utilities Commission in response to their consultation on the economics of the Site C dam. You can read it here. In short, the submission discussses how the economic case for Site C assumes that industrial demand for electricity—in particular for natural gas extraction […]
    Canadian Centre for Policy Alternatives
  • Ontario's middle and working class families are losing ground August 15, 2017
    Ontario is becoming more polarized as middle and working class families see their share of the income pie shrinking while upper middle and rich families take home even more. New research from CCPA-Ontario Senior Economist Sheila Block reveals a staggering divide between two labour markets in the province: the top half of families continue to pile […]
    Canadian Centre for Policy Alternatives
  • Join us in October for the CCPA-BC fundraising gala, featuring Senator Murray Sinclair August 14, 2017
    We are incredibly honoured to announce that Senator Murray Sinclair will address our 2017 Annual Gala as keynote speaker, on Thursday, October 19 in Vancouver. Tickets are now on sale. Will you join us? Senator Sinclair has served as chair of the Truth and Reconciliation Commission (TRC), was the first Indigenous judge appointed in Manitoba, […]
    Canadian Centre for Policy Alternatives
  • How to make NAFTA sustainable, equitable July 19, 2017
    Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers


Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Are There Labour and Skill Shortages in Canada?

Further to my earlier post on this topic, whether or not we are or will soon be experiencing labour and skills shortages is a question of critical importance to the development of sound public policy. Next week, we will get some new Statistics Canada data on job vacancies which will help support a more informed discussion.

Given projections of very weak economic growth and a real  unemployment rate which is much higher than before the recession and still stands at over 10%, it is hard to support the case that we face generalized labour shortages anytime soon.

Demand for workers can be readily filled from the ranks of the unemployed, discouraged job seekers, and the involuntarily part-time and self-employed. Unemployment and under employment are especially high among the echo baby boomers entering the work force, recent immigrants trapped in jobs well below the level of their qualifications and experience, and aboriginal Canadians.

Despite a slack overall job market, many employers claim that there are significant shortages of at least some kinds of workers across the skills spectrum. Accordingly, they have pressed successfully for a major expansion of the temporary foreign worker program which now accounts for the majority of entrants to Canada, and also for changes to the regular immigration program which would much more closely align immigrant intake with the perceived needs of employers and the job market.

Do employers have a point?

It is not hard to be skeptical. Many employers want to increase labour supply via the immigration route, especially the temporary worker route, rather than raise wages, improve working conditions, and increase woefully low levels of Canadian investment in training  of the current work force.

On the other hand, there is fairly compelling evidence of some specific skills shortages by occupation and region, such as skilled trades workers for major construction projects in Alberta, and some health care professions in many parts of the country. And we know from the detailed work of sector councils that some occupations will be hit much harder and earlier than others by the aging of the current workforce.

It is crucially important to get a handle on these kinds of current and emerging shortages so that we can respond through education, training and active labour market programs as well as through our immigration program. (To be clear, filling labour market needs is not the only purpose of our immigration programs, but it is certainly an important component.) Young people deserve to know what education and training programs are likely to lead to employment in good jobs, and unemployed and under employed workers need to be retrained in the skills which are demanded by employers. A good labour market information system would also allow workers to change jobs in an informed way.

As Lars Osberg has emphasised, knowledge of any labour and skills shortages is also essential to sound macro-economic policy.  Monetary and fiscal policy should push unemployment down to eliminate cyclical unemployment, while active labour market policies are needed to address any structural  mismatch between vacant jobs and the skills of the unemployed.

But we lack a good labour market information system, and do not even have the basic building block of a national job vacancy survey.  Surveys of employers to determine the level of vacancies are common in other countries, but the last Canadian survey was eliminated in 1978.

As I have argued before, building on an important ten year labour market outlook report by HRSDC which largely rejects the generalized labour shortages argument,  we need details of skills shortages by detailed occupation, and by locality.  Such shortages can, in principle, be identified if unemployment by occupation and by region is very low, and if wages are rising much faster than average. Reports from employers are also important.

We have to distinguish between undesirable labour and skills shortages which result in foreclosed economic opportunities and stretched public services, and the desirable state of tight labour markets which deliver low unemployment, growing opportunities for workers to rise up the skill ladder, and real wages rising at least in line with productivity… . in short, the kind of labour market which we have not seen in Canada since the early 1970s.

Fortunately, we will be getting some basic Statscan data next week based on an add-on question to the monthly business payroll survey which has now been asked for several months

This is an important start. However, this release will only give us a count of vacant positions by industry, by province and by size of firm. There will be no detail on occupation, nor on what employers tried to do to recruit workers.

While new information is welcome, I fear we can anticipate a lot of unhelpful employer and business media commentary on supposed labour shortages even at a time of high unemployment.

Fortunately, Statscan will be in a position to provide much more detailed data from the new Workplace Survey  further down the road (the release date has not yet been set.)

Credit should go to HRSDC for funding Statistics Canada work on job vacancies, which was one of the key recommendations of the Drummond Task Force on Labour Market Information.

Enjoy and share:


Comment from Paul Tulloch
Time: January 19, 2012, 9:05 am

Sorry Andrew but the irony of coming out with a jobs vacancy survey during the greatest recession in 70 years I hope is not lost on progressive economists.

as a former policy information specialist, survey developer, stats person and again muzzled because of threats- all I can say is WOW.

And people wonder why that place drove my anxiety to levels that were intolerable. When you live and breath one’s passion as a labour economist amidst this grand decline, there is no doubt about it- A Vacancy survey is at the top of my list!?

Comment from John Soden
Time: March 4, 2012, 11:48 am

Thank you for a thoughtful article. Employers that cite labour and skiils shortages should ask themselves if they are using all of the resources available to them, not least as you point out the substantial number of recent immigrants trapped in jobs well below the level of their qualifications and experience.

I have spoken with many employers who say they would like to hire these people but the provincial labour laws prevent them from doing so.

What surprises me is that these successful private sector companies are often misinformed about how the laws work and also very accepting of the limitations they place upon them.

There are some industries and some provinces that are experiencing labour and skills shortages (oil and gas in Alberta, logging, mining in northern BC) Alberta’s oil and gas industry

The adjustment of labour and skill supply to employer demand always lags is Employers and employer representative bodies there are skills shortages in some provinces and in some occup

Comment from Linda Manning
Time: April 28, 2012, 3:29 pm

Thank you for your article. It is one of the few on the topic of labour and skills shortages that recognizes at any level that there are differentiating characteristics of labour shortages and skills shortages, and across different industries and skills. Any structural shift in an economy that drives demand for a different level of and type of skills will coincidentally create unemployment and shortages.

Write a comment

Related articles