|Stuck in place: Canada’s mobility problem |
The Globe and Mail
Published Wednesday, Jun. 06 2012, 6:31 PM EDT
This summer, employers from Alberta will head south for a road show, where they will hit American cities with high jobless rates and unemployed skilled tradespeople to lure new recruits.
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Edmonton and northern Alberta need more than a thousand engineers, and several thousand more tradespeople – carpenters, welders, pipe fitters. Not in the coming years – in the next few months.
A growing number of employers in the Prairies are looking abroad – to the U.S., to Ireland, South Africa and Eastern Europe – to fill gaps in their work force. In Edmonton, they’re setting their sights further afield partly because it’s hard to convince Canadians in other provinces to move. Many find it too expensive to move, too costly to live in the west, and too difficult to leave behind family.
“What we’re finding is most of our companies have already recruited across Canada. And they still are not finding the numbers they need. So while there may be unemployed people in Ontario or Quebec or Eastern Canada – they aren’t moving here,” said Mike Wo, executive director of Edmonton Economic Development Corp., which is leading the trip, initially to Seattle, with employers such as Finning Canada and PCL.
The recruiting drive highlights a deepening conundrum in the labour market. Resource-rich parts of the country are fretting about labour shortages, even as joblessness remains elevated in other parts of Canada – particularly Ontario, Quebec and New Brunswick.
Alberta’s jobless rate, at 4.9 per cent, ?ties with Saskatchewan as the lowest in the country. The unemployment rate in Ontario and eastwards is 7.8 per cent or higher.
Rather than there being a shortage of workers in Canada, it seems they may simply have the wrong skills and live in the wrong places.
A stronger labour force, which properly matches workers’ skills to jobs, would provide a solid foundation for Canada to compete on a global scale – particularly as the country shifts to a knowledge-based economy. For workers, it can help them land a job or better opportunity in another province, potentially boosting their earnings. It also helps them acquire new skills if they do return home. For provinces that need workers, it can fill key gaps in skills or labour shortages. Broadly, it can alleviate pressures on governments as fewer people rely on jobless benefits or social assistance. And it can narrow disparities in jobless rates and wages between the provinces.
While Alberta has seen a bump in interprovincial migration in recent years, flows between provinces remain lower than they were in the 1970s and 1980s.
National focus has centred on overseas recruitment and finding temporary workers rather than on encouraging mobility within the country.
So why aren’t more people moving, and what can be done to fix it?
SHUNNING THE WEST
It’s a sunny afternoon in a Toronto industrial park, and a group of about 60 laid-off factory workers are gathered for a farewell barbeque.
The Honeywell workers lost their jobs 15 months ago as the valve and parts maker shifted production to lower-cost factories in Hungary, China and Mexico.
But it isn’t as easy as picking up and moving. “I have to take care of my father – he’s 82,” says Brendan Andrews, a machine operator, who lives in Belleville, Ont.
Instead, he’s accepting an $11-an-hour job – a wage reduction of 50 per cent – that is non-unionized. He started on a 7 am to 7 pm shift last week.
Mario Garofalo also can’t move. The 42-year-old assembler, who worked at Honeywell for 14 years, doesn’t want to sell his house and leave his parents, girlfriend and nieces and nephews behind. “If I sold now, it would be in a position of weakness – I’d have to rent. I would use up money for other things, and on living expenses,” he says.
Other workers speak of the high cost of moving, and the higher cost of living in places like Fort McMurray even if they did move. Most Honeywell workers are in their forties and fifties, meaning many have children, mortgages and aging parents.
And while Finance Minister Jim Flaherty said last month that “there is no bad job” – suggesting displaced workers should be willing to settle for less – three dozen postings of job openings on the action centre’s wall tell a different story.
Tow truck dispatcher reads one – $13 to $17 an hour, nights. Office clerk: $11 to $11.25 an hour. General labourer: $10.25 – the province’s minimum wage, and even that’s temporary. Snow removal: $12, seasonal.
“Jobs are disappearing and the ones that are still here are lower-paying. But the cost of living is going up, look at the cost of gas to fill my car,” Brendan O’Donnell says. The assembler is thinking about moving back to Massachusetts for work, but wondering how he would cover moving costs and first and last month’s rent in a new city.
Of the 200 people who lost their jobs, a few have headed back east. None have moved West. About 30 are training for second careers, and so far, only 40 have landed jobs – largely in much lower-paying positions such as Costco. Staying put, even at half the salary, seems a preferred option to moving two thousand kilometres away.
Only one in five Canadians are willing to relocate to another city for a few years – even with a pay hike of at least 10 per cent and all moving expenses covered, an Ipsos Reid poll last November found.
The same survey showed four in 10 Canadians didn’t want to leave friends and family behind, while a third said they weren’t being offered enough money to move.
Indeed, the single biggest factor hindering Canadians from moving is the cost, says Serge Coulombe, professor of economics at the University of Ottawa, who studies labour mobility.
“There are big costs, especially if you are married, and have children – you both have to find new jobs, and you have to sell your house, find new school for the kids, the kids will lose their friends,” he says.
Several other factors may be stymieing migration. For one, provincial labour markets aren’t perfectly integrated – qualifications for certification for some professions, like construction workers and nurses, can vary. So someone certified for a job in one province may not be qualified to work in another.
The biggest driver of interprovincial migration are differences in unemployment rates and wages. Given that, allowing more temporary workers – as the federal government is proposing to do – could drive down demand for Canadian workers and lower wages, thus acting as a disincentive to move, Mr. Coulombe said.
Past studies have shown “when you have more temp workers coming in, you will have less interprovincial migrants – they are a bit of a substitute,” he said.