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The Progressive Economics Forum

Job Shortages? What Shortages?

Sigh. Here we go again. More evidence-free corporate policy advocacy.

The Chamber of Commerce put out a report today – actually I can’t find much in the way of background research on their web site – which points with alarm to labour and skills shortages, and calls for a less generous EI program to get workers to move to the supposedly available jobs.

“A growing shortage of highly skilled labour is becoming desperate, threatening our ability to keep up in a global, knowledge-based economy… Our Employment Insurance Program perpetuates regional disparity and discourages Canadians from relocating to where work is available.”

Problem is that there are clearly – based on the new job vacancy data – many more unemployed workers than there are job vacancies.

And there is no evidence that wages are rising in occupations deemed by the Chamber to be in short supply. (See the report in the Globe and Mail which cites potential labour shortages in construction and hotels.) A quick perusal of the data show that average hourly earnings in construction in October, 2011 were $27.99, down from $28.14 a year earlier. Average hourly wages in accommodation and food services were a princely $13.29, up a meagre 13 cents per hours from a year earlier. (SEPH Data.)

And EI as a disincentive to inter-regional labour mobility? A lot of people say so based on myths and anecdotes, but an authoritative background study  for the Mowat Centre Report on EI by Day and Winer found that “there is no evidence in the empirical literature that regional variation in the generosity of the employment insurance system has altered internal migration patterns in Canada in a substantial manner.”

I do think that we face some skills shortages down the road which create lots of opportunities for active labour market policy to be more effective. But we do not face significant labour shortages today and the EI program does not make things worse, the Canadian Chamber of Commerce notwithstanding.

 

Enjoy and share:

Comments

Comment from Paul Tulloch
Time: February 8, 2012, 9:33 am

Do these people do any research? The vacancy survey just came out and showed empirically we have an employment problem- not a vacancy problem.

In a market economy- is it not wage increases that solve the labour shortage problem? Raise the wages and potentially the problem will go away. If not throw in the market towel and start planning worker training- state capitalism seems to be working quite fine in China even Mr. Harper is hot on the trail begging for some scraps in China today.

The only mention if human rights in Harper’s Chinese tour was by the Chinese on Harper’s handling of natives in Northern communities and the devastating living conditions.

Lets not kid ouselves Harper is there to make a political statement to the USA as his oil masters are still upset over the pipelines being cancelled in the US. If only he would work that hard for manufacturing and forestry in Canada.

They cannot be serious when they state the EI program is too generous!? If they are serious then I must say there must be a plethora of drug and alcohol dependency for those who spend their days at the Chamber of Commerce pretending to research.

Comment from Christian
Time: February 8, 2012, 10:26 am

I don’t know much about the Canadian COC, but if they’re anything like the American branch, I would be highly skeptical of all their claims.

Comment from Purple Library Guy
Time: February 8, 2012, 1:54 pm

Typo, I think. “many more employed workers than there are job vacancies.” Doubtless true, but I’m suspecting you mean “unemployed workers”.

Comment from Andrew Jackson
Time: February 8, 2012, 2:07 pm

Thanks Purple Library Guy – problem fixed

Comment from travis fast
Time: February 8, 2012, 2:32 pm

Andrew wrote:

“And there is no evidence that wages are rising in occupations deemed by the Chamber to be in short supply.”

Exactly. That is why the Chamber is crying about labour shortages now because they do not want their members to have to offer higher wages.

Comment from Purple Library Guy
Time: February 9, 2012, 3:21 pm

The chamber’s plaint is questionable on other grounds, too. “threatening our ability to keep up in a global, knowledge-based economy”

What knowledge-based economy? Our economy is increasingly skewed towards resource extraction.

Comment from T Manderly
Time: February 10, 2012, 2:36 am

True…maybe they mean the knowledge to drill oil.?;-)

Comment from travis fast
Time: February 10, 2012, 5:16 am

No no no. It is the shortage of high skilled dishwashers for Tim Hortons. Why raise wages when there is the temporary foreign worker program?

Comment from Unskilled at 40
Time: February 12, 2012, 12:58 pm

All unemployed people are considered lazy, it is easy for other’s, especially government to ignore the problem this way. There never has been a more educated in debt society in the history of the world. Realizing that once we reach our forties we are considered to be part of the senior crowd, unable to contribute to the companies bottom line, we are now considered a liabilty and are thrown away like a piece of garbage. Unable to find employment, we resort to the equity in our homes, credit cards and lines of credit until we use up all our resources. Most of us have young families and need to help them through school so they will have the degrees that will hopefully land them a job. But how can we help the next generation if all our funds are depleted.

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