It's déjà vu all over again, super-commuter edition
Sometimes I feel the need to explain Yogi Berra to young people, but I will resist the temptation.
The Globe & Mail ran a commentary over the weekend entitled “Embracing the supercommute can help solve Canada’s labour shortage” written by the head of a company that offers this service to companies facing labour shortages.
In the piece, the author makes the case that parts of Canada (euphemism for Atlantic Canada) have high unemployment - particularly among tradespersons - and other parts of Canada need those workers so why not bring them together through supercommuting? The workers get to stay in their beloved home town of Bay Roberts or Yarmouth and the employer gets the workers as they need them. Win-win.
There, in fact, was an article in the very same G&M a decade ago entitled “The rise of the super-commuter”.
The problem is that 2022 is not 2012 or any other time for that matter.
There certainly may be pockets of high trades-related unemployment somewhere in Canada but there is mounting evidence that trades and construction workers are becoming scarce all across Canada in communities small and large.
I fear this is just another central Canadian seeing an 13% unemployment rate in Cape Breton and starting to salivate.
Here’s why the super-commuting workforce is not the solution it once was.
First, in most of these areas with ‘high’ unemployment, there is also a growing shortage of trades and even more general construction workers. If you look at job vacancy data - this trend is clear - again even in regions with high unemployment. I recently interviewed employers and workforce types across Atlantic Canada and the response was uniform - it is getting very hard to secure this workforce and it has become a barrier to constructing housing across the region.
Second, related to the first point, in the areas with high unemployment there is also high or even very high seasonality in the workforce. In Cape Breton one in three workers collected EI during the year. some of that is due to ‘normal’ unemployment but my research would suggest that a large share is due to seasonality in the workforce. A person who has a job - for example works in construction for 8 months and then collects EI - is not really a candidate to move to southern Ontario to work - unless the pay is overwhelmingly good.
And, speaking of EI, construction is still the sector that has the most EI usage - by far - across Canada. I’m not suggesting that the nearly 300,000 construction workers who collected EI in 2020 were all skilled trades but it is clear that no matter the demand, a lot of construction workers are used to taking a few months off each year. A job super-commuting is not going to address this issue.
Third, the trades people are a lot older, on average, than they were in the past. That matters because the job entails six weeks on, a week off or some other configuration. As these workers get older they are less likely to want to supercommute.
Fourth, supercommuting doesn’t solve the problem, it just creates more problems such as a much higher cost of trades-related activity. It’s one thing when it is the oil sands where $150K salaries do not impact the business model but for other industries this just leads to even more upward pressure on costs.
Again, I’m not criticizing this specific company’s business model but I am seriously criticizing the implication that there are tens of thousands of skilled trades people in Atlantic Canada just dying to work in Ontario or Alberta or elsewhere if someone would just please hire them.
Solving the construction workforce shortage will not be easy but here are a few thoughts:
Use the super-commuting workforce but think further afield. There are many countries that use foreign labour to meet construction demand. In Canada, not so much.
Put a serious push on turning out trades people. Construction is always an industry with peaks and valleys but the construction workforce should be geared more towards the peak than the valley. If we have a construction workforce that can only address the demand during a trough, we will not only impede economic growth but we will push up housing prices and create a lot of other negative impacts.
Develop the ‘climate controlled’ workforce. We could be doing way more with offsite/modular construction.
Encourage more entrepreneurship in the construction/trades workforce. A plumber or electrician that works for a company is different than one who works for themselves. I would suggest that more entrepreneurs would help - although it’s not a panacea.
Finally, governments shouldn’t cannibalize the construction workforce. This is my least favourite solution but I would rather the government put on hold its large building projects or even - look away - transportation infrastructure projects - if it would help boost the number of homes constructed. I talked to one contractor who a few years ago got completely out of the home-building business and went into road building because the margins were better (he said).
Of course the problem with housing construction in Canada is not just related to the construction workforce. NIMBYism, supply chain shortages, government policies and planning and other issues are also part of the problem.
But the solution to the shortage in trades and construction workers is not to entice them to move or super-commute.
The solution is to solve the underlying problems.