Solving the tricky bits of workforce demand
There has been a flurry of stories over the past week about the growing labour shortage in the U.S. and Canada across many sectors of the economy but really focused on below average wage and part time service industry jobs. Food services, retail, the below average occupations in health care, personal services and most labourer occupations.
I’ve had business owners in these sectors express frustration with the fact they are having a hard time accessing immigrants as a solution to their workforce needs - at least directly - I think you will find secondarily immigrants are filling many occupations in these occupations and sectors (more below).
In an ideal labour market, at least my version of ideal, these jobs would be filled mostly by 15-24 year old students and by household second income earners. And historically this was more or less the case. In 2008, 64% of all minimum age workers were between the ages of 15-24. By 2018, however; the number had dropped to 52.3%.
The number of economic families led by someone at or around a minimum wage job is very low but it has been rising across Canada. In 2018 11.3% of ‘unattached individuals and lone-parent employees’ across Canada were at the minimum wage - meaning that nearly 90% were not - but still the 11.3% is up from only 5.6% in 2008.
Across the country, immigrants do make up a higher share of minimum wage workers but only 12% of immigrant workers were at the minimum wage in 2018 while 10% of those born in Canada were at the minimum - not a big difference.
Is the reason there are fewer young people working minimum wage jobs at least partly due to the fact there are fewer young people in relative terms?
When helping to develop the Greater Moncton Immigration Strategy I strenuously argued for a doubling of international students in the colleges and universities across the region. One of the main reason I argued for this was that many of these students could work in those service industry jobs while in school.
Between 2008 and 2014, the relative share of 15-24 year olds in the Moncton CMA workforce dropped faster than any of the 35 CMAs in Canada (-32%). Since 2015 the share has increased faster than any other CMA (+13%). This correlates with the rise in international students and young immigrants.
So if you really want to ensure that economic families have a living income, one solution is to ensure you have enough students and second income earners in your workforce to take those jobs. I know there are those arguing for a steep increase in the minimum wage and maybe that is a solution - particularly on a national basis. I’m a little more partial to means tested models - child tax credits, child care support, etc. but based on need.
I’m not an expert at all in this area but what I don’t want is Atlantic Canada to become the next northern Canada.
If we get to a world where it is easier to recruit workers in Toronto, Montreal, etc. than in New Brunswick, the consequences could be severe.
So, let’s attract more young families to our province. Let’s boost the number of international students in our PSE. This will help ensure we have a functional labour market across the spectrum and boost the talent pipeline for the future.
Back to my point above. If you live in any of the cities in Atlantic Canada you will have noticed a lot more newcomers in service industry jobs. As I mentioned below, there is a hotel in Moncton that has something like 14 nationalities in the firm’s local workforce but none of those immigrants was recruited here internationally. They came as spouses, partners, students and the teenaged children of immigrants.
Some are looking to get Canadian work experience. Some are building their careers in these occupations (e.g start as a clerk at Kent Building Supplies, work up the ladder and end up in the head office in Dieppe or start off as a hairstylist and end up owning your own business). And many are students at the local universities and colleges.
That sounds a bit like a well functioning labour market to me.