Thursday, 17 April 2014
What is happening to the Canadian labour market?
by Tyler Meredith
Three things you need to know about labour market policy:
1. As Minister Kenney has said on several occasions, we don’t face a widespread shortage of labour. There are regions and particular occupations where labour needs are acute, but we’re not seeing a fast pick-up in wages either.
2. The retirement of baby-boomers is a major change facing the labour market, but the labour force will still grow over the next decade and a half. Young people will be the most important contributor.
3. To find the right solutions, we first need to be clear about the problems. A lot of our needs stem from improving data collection, and the linkages between labour market actors in order to properly design educational programs, and better understand the needs of employers as they relate to skills.
Three myths about Canadian labour market policy:
Myth #1: Due to an aging population, Canada faces a looming “shortage” of workers, and a mismatch between available jobs and skills in which there are “people without jobs and jobs without people”.
Reality: While Canada does have an aging population, a lot of the claims about impending “shortages” hinge on long-term projections, which are imperfect. We need better data and deeper analysis in order to understand how employers are responding to demographic and labour market pressures.
Myth #2: New labour force growth will come from immigration.
Reality: Immigration will continue to play an important role, but ensuring younger workers get a good start is critical.
Myth #3: Supporting a more highly educated population is the main path to good, high-paying jobs in the future.
Reality: Nearly 70% of younger workers coming into the labour market already have some form of PSE. This is a major societal accomplishment, and one that has generated a rising standard of living. At the same time, however, we must also ensure that we have a mix of different skills that respond to the demand-side for labour. Substantially increasing attainment beyond this already high level, without looking at the underlying skills that programs produce, runs the risk of increasing the incidence of over-qualification.
Tyler Meredith is a Research Director at the Institute for Research on Public Policy, where he focuses on labour market and pension policy issues. Follow him on Twitter @tylermeredith.