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The Progressive Economics Forum

No Widespread Labour Shortage, widespread information gaps.

A TD Economics Special Report released on October 22nd debunked the popular economic myth spread by Minister Kenney that there are too many jobs without people. The report looks at changes in employment, unemployment, job vacancy rates, and wages. Job vacancy rates are higher for trades occupations in Western Canada, but overall job vacancy rates are low.

There is no sign of wage pressure, even in occupations with perceived shortages, which the report points out as being quite puzzling. In Saskatchewan, wages for *in demand* occupations are actually growing at a slower rate than the provincial average.

The “No Widespread Labour Shortage” line got lots of attention, but perhaps the more important finding from the report was buried. An analysis of the presence and importance of localized skills shortages is nearly impossible, given the current state of labour market information in Canada. We can analyse detailed occupational information at the national level, but that’s grossly inadequate for our needs.

Highlighting the inadequacy of current labour market information, the most recent data on job vacancies was released by Statistics Canada on the same day. It tells us that nationally there are 6.5 unemployed persons for every job vacancy (Jim Stanford and I have argued it’s more like 12 or 13 when you take broader measures of unemployment into account). That tells us that there are a lot of people without jobs. It tells us nothing about local labour market conditions by even broad industrial categories. And since the job vacancy numbers were added onto the SEPH, it tells us nothing about occupations at any level.

Sam Boshra displays the information gap well here, where he shows a cross-tab of job vacancies by provinces and industries, with most of the data suppressed for confidentiality.

If Minister Kenney really wants to help workers and businesses identify and address skills gaps, he should work with Statistics Canada to close the labour market information gap first.

Enjoy and share:

Comments

Comment from Paul Tulloch
Time: October 24, 2013, 1:55 pm

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Job_Vacancy_Rate_by_country_2013Q2.PNG&filetimestamp=20130913092120

It is pretty obvious that Canada’s Job vacancy rate is not a problem when you compare it to other countries. For example using data from Eurostat we would be located in the middle of EU countries for the 2nd quarter or 2013. (see link) And this during a time of recession for many of the countries where job shortages abound.

Comment from Sam Boshra
Time: October 26, 2013, 3:08 pm

Thanks for the note, Angella. The original post briefly touched on the reason for the near-complete job vacancy data suppression in the linked table. Assuming no unclassified businesses, a four-record-minimum and a survey sample size of 15K, at least 7% of all sampled businesses would need to report job vacancies to average out an unsuppressed entry in each cell. That’s unlikely given the recently estimated 1.4% job vacancy rate.

Unfortunately, according to SEPH data, ‘unclassified’ is the largest growth sector (if one can call it that) since the Great Recession. The data suppression rules applied aren’t specified. Nor is data on the number of businesses
reporting job vacancies disclosed. Those are separate, albeit related, issues.

The obvious solution to the data suppression problem highlighted in the linked table is an increase in the BPS sample size, by magnitudes.

Comment from Mark DeWolf
Time: January 8, 2014, 9:22 am

John Risley, CEO of Clearwater Seafoods, recently told a Halifax workshop on employment (organized by a Liberal riding) that Canada does not have an unemployment problem; it has a lack of workers problem. I don’t know Mr. Risley’s politics but he clearly believes (he says from his own experience trying to hire skilled workers) that there would be more Canadians employed if only they would get some education and/or training. In a rapidly changing world, that makes sense, but the TD report would appear to show that this is not the entire problem.

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