StatCan report casts clouds on claims of a widespread labour shortage in Canada

OTTAWA –

A brand new report is casting doubt on the concept that Canada is dealing with a widespread labour scarcity and bolsters the arguments by some labour economists that top job vacancies aren’t as a consequence of a scarcity of staff.

The Statistics Canada evaluation finds there are not any labour shortages for jobs that require excessive ranges of schooling, suggesting different components, similar to a mismatch in abilities and pay, is perhaps guilty for a excessive variety of empty positions.

In the aftermath of the COVID-19 pandemic, labour shortages have grasped headlines from coast to coast as companies have marketed extra job openings than ever. Job vacancies skyrocketed to multiple million at one level final yr.

The perceived countrywide labour scarcity has put strain on governments to assist companies discover staff, together with by rising Canada’s immigration targets.

But the report printed this week compares unemployment and job vacancies by schooling degree and paints a extra nuanced image of the labour market.

“Things look really different depending on whether you look at vacancies that require a high level of education, versus those that require a high school diploma or less,” stated Rene Morissette, the assistant director of social evaluation and modelling division on the federal company.

The report, which checked out labour information between 2016 and 2022, discovered for jobs requiring a bachelor’s diploma or greater schooling, there have been at all times fewer jobs out there than individuals to fill them.

For instance, there have been 113,000 vacant positions requiring a bachelor’s diploma or greater schooling within the fourth quarter of 2022, however 227,000 people who held such an schooling have been unemployed throughout the identical interval.

But for positions that required a highschool diploma or much less, the scarcity of staff solely began within the third quarter of 2021.

Morissette stated the findings do not imply that there are not any labour shortages in some markets, however shortages will not be as in depth as beforehand assumed.

“It’s certainly conceivable that there are local shortages in some positions,” Morissette stated. “What we’re saying is that the shortages may not be as widespread as initially assumed in the early discussions about the high vacancy rates in Canada.”

For employers attempting to fill vacancies that require a post-secondary schooling, the report says their hiring challenges can’t be attributed to an absence of staff out there with these {qualifications}.

Instead, the difficulties could also be the results of a mismatch in abilities required for the job and people possessed by candidates. Another issue might be that employers aren’t providing wages which are on par with what job seekers count on.

The report additionally casts doubt on the hiring challenges dealing with corporations attempting to recruit staff with decrease ranges of schooling.

“The degree to which these job vacancies can be attributed to labour shortages in specific low-skilled occupations instead of relatively low-wage offers and fringe benefits or other factors remains an open question,” the report says.

Jim Stanford, an economist and the director of the Centre for Future Work, says the report from Statistics Canada busts “long-standing myths” about labour shortages within the nation.

“If you were really short of labour, and you couldn’t find someone to do that minimum wage job at a McDonald’s restaurant, then why aren’t they either increasing the wage or trying to replace the work with machinery?” Stanford stated.

“Neither are happening, which suggests to me that employers in general are quite happy with the current state of affairs, no matter how much they complain about labour being in short supply.”

So what explains the excessive variety of job vacancies?

Morissette stated for low-skilled industries, companies could also be selecting to maintain wages low and settle for greater emptiness charges.

“For employers that have negligible training costs, a human resource strategy that combines relatively low wages with high worker turnover and some vacancies might actually … maximize profits,” he stated.

The federal authorities has stored an open ear to business teams elevating alarm bells about labour shortages.

In the autumn, Ottawa introduced new immigration targets that will see the nation welcome 500,000 immigrants yearly by 2025. Immigration Minister Sean Fraser has touted the brand new plan as an answer to the nation’s labour woes.

Canada has additionally skilled a surge within the variety of short-term overseas staff introduced into the nation to assist companies fill vacant positions.

The obvious scarcity of low-skilled staff may push policymakers to suppose that much more short-term staff are wanted, however Stanford stated that will be a “disastrous” conclusion to attract from the report.

Many economists have reservations about short-term overseas employee packages that they fear can suppress wages domestically, if used excessively.

“The goal of immigration policy should not be to solve the recruitment problems faced by low-wage employers, or any employers for that matter,” he stated.

This report by The Canadian Press was first printed May 27, 2023.