Social Policy in Ontario

No shortage of workers – just a shortage of training

Posted on November 19, 2013 in Delivery System

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TheGlobeandMail.com – Report on Business/Economy/Economy Lab
Nov. 19 2013.   Andrew Jackson

Two major recent studies – from Derek Burleton and his colleagues at Toronto-Dominion Bank, and from former senior federal government official Cliff Halliwell published by the Institute for Research on Public Policy – provide excellent overviews of recent developments in the Canadian job market, and an informed framework for thinking about our future skills needs.

Pointing to the lack of wage growth in occupations that are allegedly in short supply of workers, as well as limited reported job vacancies, the studies agree that the extent of skills shortages in Canada today is greatly exaggerated. Both question the need for large numbers of temporary foreign workers.

This message seems to have finally got through to the Harper government. In a speech to the Vancouver Chamber of Commerce on Nov. 14, Employment and Skills Development Minister Jason Kenney told employers to stop complaining and to stop relying excessively upon temporary workers. Instead, he said, employers should “put more skin in the game” by increasing wages in high-demand occupations and by investing more in the training of Canadians.

The TD and IRPP studies provide balanced overviews of our future skill needs. Neither see generalized shortages as an acute danger, notwithstanding the pending (if increasingly delayed) retirement of the baby boom generation. Indeed, Mr. Halliwell says we should welcome a tighter job market, after years of stagnant real wages for most workers.

Graduates from our postsecondary education system, together with new immigrants, will more or less match job vacancies opening up due to the retirement of highly skilled workers. And employers can be expected to minimize shortages as they emerge by investing in capital and skills so as to raise productivity.

All that said, these studies note that we face some specific skills shortages today in a limited number of occupations and regions, and that some employers may face increasing difficulties finding workers with the right education and skills to fill available jobs in the future.

This can, however, be seen more as an opportunity than a curse, given the significant unemployment and underemployment of today, especially for youth, recent immigrants and aboriginals. The challenge is to invest in skills to increase access to good jobs for Canadians who want to get ahead, and thus to forestall future shortages that might lower our economic potential.

One set of policies that makes sense is to raise the education and skills level of marginalized groups and to ensure that unemployed workers, especially the long-term unemployed, have access to retraining. While Canada has one of the most educated work forces in the world, we have a relatively high proportion of workers with low literacy and numeracy levels, and many recent immigrants need help to upgrade their qualifications.

Programs delivered by the provinces with the support of the federal government address these issues to a degree, although spending is well below the industrial country average. Unfortunately, the federal government proposal to introduce the Canada Jobs Grant will shift some funds away from training the most marginalized workers and toward employer-sponsored training.

Mr. Halliwell argues that our current educational and labour market policies fail the significant proportion of the work force that leaves the educational system with less than a postsecondary qualification and finds relatively low-paying, less-skilled jobs. These workers tend to receive little or no employer training – and are excluded from current government programs.

He suggests that we think about “second chance” programs for this group, to improve their opportunities in the job market later in life and to help fill employer needs for skilled workers.

One option that Mr. Kenney might consider is to give more employed workers access to Employment Insurance (EI) benefits for training leaves, on the model of apprenticeship training. Apprentices qualify for EI benefits when they are away from their regular job for the classroom part of their program.

EI-supported training leaves would allow workers to take a community college or similar training programs – still at some considerable financial sacrifice to themselves, since benefits only replace up to 55 per cent of normal wages and since tuition costs would have to be paid.

Employers could contribute by making sure that a worker could return to the job from which she or he took a leave and, perhaps, by providing a supplementary income if the training program met the needs of their business.

EI-training leaves would empower individual workers to invest in their skills, and help create a higher-skilled work force for the future. Mr. Kenney might consider this option as an alternative to the proposed Canada Jobs Grant, which has won few supporters to date.

Andrew Jackson is the Packer Professor of Social Justice at York University and senior policy adviser to the Broadbent Institute.

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Tags: economy, participation, standard of living, youth

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