Key Issues

Cliffs Analysis
Other Issues
Reasons for Concern

Comments on: Canadas Labour Market in the

Upcoming Decade
Cliff Halliwell

May, 2013

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

A Key Theme

A key theme in recent Canadian policy is labour scarcity:

1

Scarcity in specific regions and sectors

Scarcity of specific skills (especially, trades)

Concern about general labour scarcity as the baby boom retires

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Policy Response

A package of actual and potential policy responses has emerged:

Temporary Foreign Workers (and permanent immigration)
targeted at the West and in some specific occupations
Arguments that we need to promote trades training relative to
university education
Policies aimed at keeping older workers in the labour market
longer

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Cliffs Analysis
A very sensible analysis with an underlying theme that scarcity or,
rather, higher wages, is not a real problem
He does this in part by pointing out that some of the more
alarmist uses of data are wrong (e.g., that the only source of
skilled labour supply growth will be from immigration)
Argues effectively that there is no reason to think that GDP per
capita growth requires net labour supply growth (shortage
relative to what?)
Temporary Foreign Worker programme should be for temporary
jobs not temporary workers
Sensible discussion of what is really coming with the retirement
of the baby boom
Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Cliffs Analysis

If scarcity isnt the main problem then what is?

Productivity growth. Interesting idea that rising wages (partly in
response to scarcities) could help promote productivity growth
(Melitz model in trade)
Set up training to provide effective second chances (more an
equity issue than an efficiency one?)
Designing programmes like EI for an ageing labour force

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Could Cliff be Bolder?

Labour supply and productivity growth discussion:

keeping older workers in the labour force longer has the best
potential bang for the buck in terms of attenuating the slowing of
labour force and GDP per capita growth.
At issue is whether enough are planning to work longer. But
enough relative to what benchmark?

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Come on, Cliff. Get Bolder

Argues against the idea that there is likely alot of unused skills in
the immigrant inflow (Ferrer et al(JHR)):
Should there be a much greater investment in helping immigrants
who have been here for longer to build their skills, especially
official language skills? The answer is likely yes. It may be
low-hanging fruit.

Puts agricultural workers in the category of temporary jobs that

need TFWs. But why subsidize this sector?

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Reasons for Concern

Participation Rate, Males, Age 25-44

98
96

Participation Rate

94
92
90

HS Drop Outs
HS Grads

88

PS Grads
86

BA+

84
82
80
1990

1995

2000

2005

2010

2015

Year

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Reasons for Concern

Employment Rates, Males, Age 25-44

95

Employment Rate

90

85
HS Drop Outs

80

HS Grads
PS Grads

75

BA+

70

65
1990

1995

2000

2005

2010

2015

Year

Cliff Halliwell

The Labour Market in the Upcoming Decade

Key Issues
Cliffs Analysis
Other Issues
Reasons for Concern

Reasons for Concern

Employment Share of Aggregated
Occupation Groups
Natural Sciences

Social Science and related

Medecine and health

Clerical & related

Sales

Service

Mining, oil and gas

Processing,machining&crafts

Fabricating

Construction

Material & transport

1.5
1
.5
1.5
1
.5

Employment Share

.5

1.5

Managerial & admin.

1980

1990

2000

2010

1980

1990

2000

2010

1980

1990

2000

2010

1980

1990

2000

2010

Survey year
Source: LFS 19762008.
Cliff Halliwell

The Labour Market in the Upcoming Decade