Gaping holes in our knowledge of the labour market
Published by Remi Goc
Published on July 21, 2011
In the late 1990s, Canada opened its doors to the world's best and brightest computer scientists, luring them with the promise of steady, well-paying jobs.
Then the bubble burst. Thousands of Web designers and engineers were forced into joblessness or underemployment. The knock-on effect was to dramatically widen the earnings gap between recent immigrants and Canadians - among men, new Canadians in 2005 earned 63 cents for each dollar earned by the Canadian-born, down from 85 cents in 1980.That miscalculation illustrates both how difficult it is to predict future labour market needs and why it's so important to get it right. It's not just skilled immigrants whose livelihoods and futures can be hurt by a mistake. It can also hit students who are lured into one area of postsecondary study, like teaching, only to see opportunities dry up by the time they graduate. It can also strike older workers who retrain for other professions but still can't land a job.
The consequences of getting it wrong can be a problem for more than just individuals. It can hurt an entire industry or sector, as well. In the 1990s, Alberta's oil patch underestimated its need for workers. A sudden pickup in demand meant projects had to be delayed because of the worker shortages and, by 2004, employers had to hire back workers at a much higher daily rate.
Currently, tech companies are reporting a shortage of software developers, while several provinces can't find enough nurses. "We don't have a great track record" of predicting labour needs, said Don Drummond, fellow at Queen's University and former chief economist at Toronto-Dominion Bank who has studied solutions to the problem.
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Canadian Manufacturers & Exporters (CME) is Canada's largest trade and industry association.
