Canada Has A Labour Skills Shortage – Maybe

[Big Guy]

Our federal government has made changes in our foreign temporary workers program, created stricter unemployment insurance eligibility rules and the Canada Jobs Grant. That grant program remains very unpopular with the provinces. The PMO has done this on the premise that we were in a job crisis. Prime Minister Stephen Harper has called the skills mismatch one of Canada’s most pressing economic problems but now, a new report by the Parliamentary Budget Office finds that’s just not the case.

Canada’s budget watchdog says there is little evidence to back up Ottawa’s warnings of serious labour and skills shortages. In fact, the independent watchdog’s labour market assessment, released Tuesday, finds the current employment situation isn’t any different from that before the 2008-09 recession.

Can both be correct?

Who do you believe – The PMO or the Parliamentary Budget Office?

[hitops]

We've had a labor shortage out here for probably a decade, so going back to 2008-2009 doesn't surprise me.

The fact that an electrician or plumber here can routinely make $10 - $15 / hour more than a nurse, tells you there is a labor shortage. I don't begrudge them, they are appropriately charging based on the demand for their services.

I feel parents and highschools have done a massive disservice to kids by mindlessly promoting university without any clear employment-related goals. The trades are looked down upon, wrongly. They take less than half the training time than a normal degree, cost probably anywhere from 1/5 to 1/10 of a degree (often nothing due to employer sponsorship), and generally result in immediate gainful employment. Meanwhile a huge chunk of degrees today come with a lot of debt and minimal market value.

Edited March 26, 2014 by hitops

[Peter F]

The fact that an electrician or plumber here can routinely make $10 - $15 / hour more than a nurse, tells you there is a labor shortage

How does that translate to a labour shortage? Seems to me that the higher wages are attracting the labour. If there is a shortage it isn't because of parents and high-schools but because industry isn't paying enough and so there is a shortage.

Perhaps you mean a shortage of cheap labour?

[hitops]

How does that translate to a labour shortage? Seems to me that the higher wages are attracting the labour. If there is a shortage it isn't because of parents and high-schools but because industry isn't paying enough and so there is a shortage.

Perhaps you mean a shortage of cheap labour?

No industry is paying lots, that's why they can get $50-60 / hour or more. Since this is far higher than historically relative to other jobs, we call it a shortage.

We can take your argument further and say that we have only 10 plumbers in the whole province. They each charge $2000 / hour. People who don't want to pay that, don't hire plumbers, and on paper everything balances out and there is 'no shortage'.

We can measure shortages in other ways now. Home builders take longer to build homes here right now, due to waiting to available crews for each part of the job.

All you hear about on the news is how students suffer from employment after uni. In reality there are great opportunities for income in the trades, but your art history degree won't get you there.

Edited March 26, 2014 by hitops

[Peter F]

So a shortage of cheap labour. Understood.

As for parents and schools overvaluing university educations: Canadian statistics appears to support parents and schools in that the higher the education the more likely to reach higher incomes.

High-income Canadians tended to be highly educated. Over two thirds (67.1%) of the top 1% had attained a university degree compared to 54.6% of the top 5%, 50.3% of the top 10% and 20.9% of all Canadians aged 15 and over.

Highly educated Canadians are also more likely to have high incomes. Nearly one in four (24.1%) of those who held a university degree were in the top 10% in 2010.

In contrast, one in ten of those who had a postsecondary certificate or diploma below bachelor level made it into the top 10%, while just under one in twenty of those with a high school diploma and one in fifty of those who had no certificate, diploma or degree were in this group.

http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011003_2-eng.cfm

You may very well be correct about higher-education not being all that useful for those who live and work in Alberta - but it wouldn't apply everywhere.

[Moonlight Graham]

We've had a labor shortage out here for probably a decade, so going back to 2008-2009 doesn't surprise me.

The fact that an electrician or plumber here can routinely make $10 - $15 / hour more than a nurse, tells you there is a labor shortage. I don't begrudge them, they are appropriately charging based on the demand for their services.

I feel parents and highschools have done a massive disservice to kids by mindlessly promoting university without any clear employment-related goals. The trades are looked down upon, wrongly....Meanwhile a huge chunk of degrees today come with a lot of debt and minimal market value.

I agree, absolutely. The fact is, when I was in high school, if you had the grades to get into university my high school counselors never even considered/mentioned college as an option. Community college was considered for "dumb people". Well, I know some "dumb" people who are now dental hygienists and make $35/hour or more...pretty smart if you as me.

Some post-secondary programs should legally come with disclaimers to students about potential future employability problems.

[Moonlight Graham]

So a shortage of cheap labour. Understood.

As for parents and schools overvaluing university educations: Canadian statistics appears to support parents and schools in that the higher the education the more likely to reach higher incomes.

http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011003_2-eng.cfm

"High-income Canadians tended to be highly educated. Over two thirds (67.1%) of the top 1% had attained a university degree compared to 54.6% of the top 5%, 50.3% of the top 10% and 20.9% of all Canadians aged 15 and over."

You may very well be correct about higher-education not being all that useful for those who live and work in Alberta - but it wouldn't apply everywhere.

Parents and schools over-value many Arts degrees, not university degrees in general. You're going to find a lot of doctors, lawyers, engineers, scientists, and business professionals etc. making a lot of the big salaries in Canada, and most can't get those skills in community college. It's much harder to make over $250k a year (top 1%) or even over 100k/year with a degree in philosophy or history etc. Many Arts degrees teach facts and theories, not employable skills & knowledge.

Edited March 26, 2014 by Moonlight Graham

[hitops]

Parents and schools over-value many Arts degrees, not university degrees in general. You're going to find a lot of doctors, lawyers, engineers, scientists, and business professionals etc. making a lot of the big salaries in Canada, and most can't get those skills in community college. It's much harder to make over $250k a year (top 1%) or even over 100k/year with a degree in philosophy or history etc. Many Arts degrees teach facts and theories, not employable skills & knowledge.

I don't mean to say university is pointless. I have a post-graduate degree and earn a good income. While you need a degree for those 'good' jobs, there are also a ton of degrees that are close to useless, and this trend is increasing rapidly.

You are dead right that many parents and school counselors don't recognize that just getting a university degree is not the key. Getting a useful one is. Many, many arts degrees will leave you way behind the guy with the 1 year community college trade cert.

I agree, absolutely. The fact is, when I was in high school, if you had the grades to get into university my high school counselors never even considered/mentioned college as an option. Community college was considered for "dumb people". Well, I know some "dumb" people who are now dental hygienists and make $35/hour or more...pretty smart if you as me.

Some post-secondary programs should legally come with disclaimers to students about potential future employability problems.

Absolutely. But the incentives of universities are to get as many students in as many programs as possible (paying as much tuition as possible). The value of the degree is secondary.

Edited March 26, 2014 by hitops

[Peter F]

Well I am not going to argue that any degree is a guaranateed gateway to vast wealth. But I will argue that less education is a guaranteed gateway to less wealth. Edit to add: and there are many folks with Art degree's making pretty good bucks.

The cheap skilled labour problem isn't due to parents overvaluing higher-education, but due to Industry failing to properly forecast needs and arranging/lobbying and/or paying for the skills training to meet their needs. Thus much higher wages in Alberta to attract that skilled labour from elsewhere.

Edited March 26, 2014 by Peter F

[hitops]

So a shortage of cheap labour. Understood.

As for parents and schools overvaluing university educations: Canadian statistics appears to support parents and schools in that the higher the education the more likely to reach higher incomes.

http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011003_2-eng.cfm

You may very well be correct about higher-education not being all that useful for those who live and work in Alberta - but it wouldn't apply everywhere.

What do you mean by cheap labor? Can this be defined?

Understand I'm not against post-secondary education. I took over 12 years of post-secondary education and it was worth it in financial and other ways.

There's no question university degree on average lead to higher incomes. But when you post stats like that, understand they are talking about the the totality of the work force. People who got degrees 30 years ago did not get the same kind as today. At that time higher education was much more closely aligned to real work relevance, and had a much smaller cohort of mainline degrees.

This avoids dealing with the issue today - the constant reports of poor employment for youth. I saw a special on cbc and it was almost laughable. They interviewed 3 student concerned about 'paying back loans' and 'finding a job' after education. Oh and what were they taking? Art history, women's and native studies, and art respectively. lol Well.......ya. If you do that, your prospects are not great.

And this is the problem - today universities are full of endless iterations of various arts fields. This leads your average nearly-brain dead (in terms of real world experience) student will a false impression that these are legitimate, viable options. It doesn't help that they may be trendy or cool to study. Real life bites later, and this is a disservice to these students.

Get who they did not interview? Engineering, medical, computer science etc students. I guess that would defeat the message of that show. Plus it's hard to find them wandering the streets when they are planted in the library.

Well I am not going to argue that any degree is a guaranateed gateway to vast wealth. But I will argue that less education is a guaranteed gateway to less wealth. Edit to add: and there are many folks with Art degree's making pretty good bucks.

The cheap skilled labour problem isn't due to parents overvaluing higher-education, but due to Industry failing to properly forecast needs and arranging/lobbying and/or paying for the skills training to meet their needs. Thus much higher wages in Alberta to attract that skilled labour from elsewhere.

The US is a perfect example of what's going on. They have such a huge supposed job shortage, yet they import tons of Indians every year to do technical skills jobs because Americans don't have the skills.

Go and check out the kids of immigrants families in Canada, particularly of Indian or Oriental decent. They do great, and they take useful degrees. Their parents make sure of it, and this is born out in the stats.

Edited March 26, 2014 by hitops

[overthere]

You may very well be correct about higher-education not being all that useful for those who live and work in Alberta - but it wouldn't apply everywhere.

There is a skilled labour shortage in SK now, and very soon will apply in BC as their many energy related projects compete for a fintie number of silled laboput positions.

I don't know what you mean by 'higher education' though. Many trades people are very well educated in their fields, which have technical and math components that would crush the brains of many university education generalists.

Many Arts degrees teach facts and theories, not employable skills & knowledge.

It's not just Arts degrees. At one time I hired people with commerce degrees. They all were proficient with Excel, but beyond that they knew nothing about business in general and our business in particular. University grads were no better or worse than those with business diplomas or those that had no post secondary training but had learned on the job. The real training came on the job, something some grads were reluctant and/or arrogant about acknowledging.

I suggest that those with the most relevant employable skills/knowledge coming out of uni are those with specific technical skills like medicine, some science degrees, and -with hesitation- engineers. My quibble with engineers(hired plenety of engineering people) is that those coming straight from school really had no applied skills, but were quite certain they did. They'd never run an actual project in their lives although they were wizards with the project software. They were unaware that projects required people skills too. I actually had better immediate results form Technologists from two year programs.

[bush_cheney2004]

....My quibble with engineers(hired plenety of engineering people) is that those coming straight from school really had no applied skills, but were quite certain they did. They'd never run an actual project in their lives although they were wizards with the project software. They were unaware that projects required people skills too. I actually had better immediate results form Technologists from two year programs.

This is a two edged sword...organizations need confident technical talent to solve real problems, even if it means they lack solid collaboration and communications skills. Many engineers actually come to (mistakenly) resent the bloated business side as an impediment to "getting things done". It is a clash of professional culture and purpose.

[hitops]

There is a skilled labour shortage in SK now, and very soon will apply in BC as their many energy related projects compete for a fintie number of silled laboput positions.

I don't know what you mean by 'higher education' though. Many trades people are very well educated in their fields, which have technical and math components that would crush the brains of many university education generalists.

It's not just Arts degrees. At one time I hired people with commerce degrees. They all were proficient with Excel, but beyond that they knew nothing about business in general and our business in particular. University grads were no better or worse than those with business diplomas or those that had no post secondary training but had learned on the job. The real training came on the job, something some grads were reluctant and/or arrogant about acknowledging.

I suggest that those with the most relevant employable skills/knowledge coming out of uni are those with specific technical skills like medicine, some science degrees, and -with hesitation- engineers. My quibble with engineers(hired plenety of engineering people) is that those coming straight from school really had no applied skills, but were quite certain they did. They'd never run an actual project in their lives although they were wizards with the project software. They were unaware that projects required people skills too. I actually had better immediate results form Technologists from two year programs.

I think this bears repeating. Very true!

[Bonam]

I suggest that those with the most relevant employable skills/knowledge coming out of uni are those with specific technical skills like medicine, some science degrees, and -with hesitation- engineers. My quibble with engineers(hired plenety of engineering people) is that those coming straight from school really had no applied skills, but were quite certain they did. They'd never run an actual project in their lives although they were wizards with the project software. They were unaware that projects required people skills too. I actually had better immediate results form Technologists from two year programs.

Why would you put engineers fresh out of school in charge of running a project? Fresh out of school they should be doing the nitty-gritty technical stuff and sitting in on project meetings to get them ready to help coordinate projects in the future, not being put into management right away.

Engineers fresh out of school should be analyzing circuits, designing mechanical systems, programming software, etc.

Edited March 26, 2014 by Bonam

[Mighty AC]

The OP covers this issue well but here is an article on the topic. http://www.montrealgazette.com/business/economy/Budget+watchdog+says+Harper+government+wrong+labour/9659286/story.html

The report does suggest the Finance Department has been deliberately dishonest.

Of note in the PBO report is a section that suggests the Finance Department used less-ideal methodology, perhaps deliberately, to reach a conclusion that job vacancy was a growing problem when it released the Jobs Report analysis alongside the February budget.

As well, Finance did not analyze the current data in comparison to previous recovery periods, and appeared to pick and choose time periods for comparison without explanation.

The report adds that particularly among young workers, there is indeed a skills mismatch: young workers are often overqualified for their jobs.

Edited March 26, 2014 by Mighty AC

[Big Guy]

Some interesting stats at:

http://www4.hrsdc.gc.ca/[email protected]?iid=54

[Peter F]

So what is the issue being discussed? That tradespersons can make a nice living? That people with university degrees can't? or that they can but its unlikely? or that it depends upon the degree?

The original OP asked if Harper was right (lack of skilled labour) or is the PBO right (no lack of skilled labour).

My position is that if there is a skilled labour shortage then Industry can fix that by training people to meet their needs. I absolutely do not agree that its the parents problem to fill the so-called shortage by pushing their kids into trade schools. I think its backwards to expect the school system to educate to meet the requirements of industry. Industry should be taking steps to meet their requirements. Of course they do this the easy way by kicking up wages and hope enough skilled tradespeople show up for the jobs....

It isn't mom & dad's job to make sure industry has enough trained personnel - thats Managements job.

[Michael Hardner]

Why would you put engineers fresh out of school in charge of running a project? Fresh out of school they should be doing the nitty-gritty technical stuff and sitting in on project meetings to get them ready to help coordinate projects in the future, not being put into management right away.

Engineers fresh out of school should be analyzing circuits, designing mechanical systems, programming software, etc.

Good post. Also, the post above talks about communication - which is why some of the best PMs I had managing me had arts degrees. Also, sales people, marketing, law, and creative design. In the digital age, we need people who can speak and who can write.

[cybercoma]

Canada’s budget watchdog says there is little evidence to back up Ottawa’s warnings of serious labour and skills shortages. In fact, the independent watchdog’s labour market assessment, released Tuesday, finds the current employment situation isn’t any different from that before the 2008-09 recession.

I've been saying it for awhile now. The problem is not "jobs without people and people without jobs" as the government claims. They're taking their cue from the business sector that is claiming this. The problem is that there are jobs without people because business refuses to respond to the demand for labour. Employees are demanding more for their labour. Companies refuse to pay it. They complain about a skills shortage to the government, so the government allows them to hire foreign workers at lower wages. It's not that foreign workers have better skills.

[cybercoma]

No industry is paying lots

Not if they can't attract people to the jobs with the benefits, they're not. They complain that there's a labour shortage. You can't have massive unemployment and a labour shortage. Peter F is exactly correct. There's a shortage of labour at the prices industry wants to pay. That's like saying there's a Maserati shortage because they don't sell them at a price you're willing to pay for it. There's not a shortage, you just don't want it bad enough to pay the asking price.

[Bob Macadoo]

My quibble with engineers(hired plenety of engineering people) is that those coming straight from school really had no applied skills, but were quite certain they did. They'd never run an actual project in their lives although they were wizards with the project software. They were unaware that projects required people skills too. I actually had better immediate results form Technologists from two year programs.

Then you are the exact problem. You hired a graduate to run your project as I suspect it was cheaper than paying for the experience or paying to develop that student before dropping him/her into the soup. Textbook of employer not contributing to their own success and blaming; parents, school, government that they aren't providing cheap labour.

You hire new graduates for controlled tasks so that you can develop other skills. You're hiring for a learner/worker not a ready-made manager......even McDonald's understands that.

[gunrutz]

I think this is a complicated problem, and while there is a relationship between what people are training for and what skills industry needs it isn`t a completely direct one. No doubt there are too many people in make believe University programs that have no business existing in the first place, but i also think there are just too many people in university in general, there are tons of kids who leave with a science or engineering degree that don`t find work in that field.

When we talk about industry not finding laborers, that isn`t just skilled trades at the oil sands, that includes businesses like tim hortons, and that aspect of this bothers me more than the rest of it, here we have national and international billion dollar corporations that want to do business in some places with really hot economies while expecting they should be sheltered from the economic reality of that place. A lot of the foreign worker issues come out of that sort of business, which is simply ridiculous, pay what the market demands, raise your prices if need be, or dont open up shop there,dont expect that you can ignore the realities of that area. When labor is in demand wages should go up, when it is not, wages go down, unless of course you can ship in people from who knows where and pay them much less. So no, in that way there is no labor shortage, there is a refusal to pay what the market demands, capitolism for the corporations, not for the workers.

If companies need more skilled labor they could provide the training as well, but why would they when there are opportunities to bring in much cheaper labor from elsewhere, i just dont buy the argument that foreign workers are the only choice they have, that is the choice they want to have.

[WestCoastRunner]

I think its backwards to expect the school system to educate to meet the requirements of industry. Industry should be taking steps to meet their requirements.

This is quite frankly, wrong. The education system, including universities and colleges, work directly with industries to tailor their programs to meet the needs of the labour force. Industry should not take steps to meet the requirements of the education system. This is totally backwards. Take for example, the computer industry. Way back when, we had cobol and rpg programmers. As technology progressed, industries were asking post secondary institutions to provided graduates with knowledge of more progressive computer languages (ie java, .net). Colleges and universities had to comply and did indeed eliminate cobol and rpg programming courses and introduced more current courses.

[WestCoastRunner]

It isn't mom & dad's job to make sure industry has enough trained personnel - thats Managements job.

As a parent, I would think it is mom and dad's job to ensure that their children are pursuing the career that they find the most fulfilling and that meets their goals, whether it is financial (to support a family) and/or to meet their artistic/scientific/whatever needs or both.

[Peter F]

This is quite frankly, wrong. The education system, including universities and colleges, work directly with industries to tailor their programs to meet the needs of the labour force. ...

If that is so then why are there so many people with these 'useless' degrees i keep hearing about?

No doubt some capitalists do help various schools set up courses that serve their manpower needs through grants/scholarships or even funding.

Some but not all, probably not even most and probably only those with lots of money.

But that is not to say that it is the schools and universities task to make sure industry meets its manpower requirements is it.