Labour shortages – cause and effect

The government loves to talk about the ‘lowest unemployment rate in 30 years’ and beam from ear to ear about how this proves the success of their economic program. The reality is that the mix of high out-migration, seasonal employment, declining birth rates, declining students and lack of immigration has led to a serious problem in New Brunswick.

The newly formed NB Biz Council stated last week that the labour shortage was the number one issue facing New Brunswick during this election. Another labour-related group called for Jody Carr’s resignation. Business and labour groups have been sounding the alarm for several years on this issue.

How could a labour shortage happen in New Brunswick?

There are labour shortages in basically three categories:

1) Low wage industries generally ($6.50-$9.00/hour wages). These jobs are mostly found in retail, services and some manufacturing.

2) Skilled trades such as welders, electricians, etc. The pull of Alberta is becoming too strong for these folks and we have not been backfilling the stock.

3) Specialized, niche technical skills in IT, health care, etc.

There are a number of toxic elements that mixed together create the situation we face today.

One, chronically high seasonal employment coupled with 14 straight years of net out-migration. There are 100,000 seasonally employed people in New Brunswick and an increasing number of folks are opting for Alberta rather than 5 months of work + pogey. Alberta and its companies have long preferred immigration from Atl. Canada to international sources. This is putting pressure on seasonal employers in fish, farming and certain manufacturing industries – as well as tourism.

Two, the decline in the student population has put more pressure on the retail and other sectors that rely heavily on part time workers.

Three, the lack of immigration. Immigration has always been used in the large urban centres to backfill entry level jobs in retail, transportation, manufacturing, services, etc. However, for some, yet to be determined reason, we always focus on ‘skilled’ immigrants or ‘immigrant investors’ and the like.

Four, the lack of a coherent industry training vision. This is a problem both of government and industry and the post-secondary educational sector.

The solution? The province needs a people strategy (not a mix of training or immigration or post-secondary or birth-stimulation strategies) that takes a long term view.

Here are a few quick ideas:

1) Tie immigration to the entry level needs in the economy. There are people in the world for whom $8/hour would be a good job. The old guru, Francis Maguire once casually said in a meeting that we should attract 10,000 Guatemalans. People chuckled. They shouldn’t have. He’s right.

2) Have an in-migration strategy for technical and niche skills in IT, health care, etc. There are numerous examples of expatriate New Brunswickers that have moved back to NB for these types of jobs. NB happens to be a great place to live and work. But, note to the government, only do this will real jobs. The Premier’s little road show a few years ago was a total flop, I am told, because he did not take any real IT or high end jobs with him. People were told to go to the nbjobs website and were greeted with 15 call centres.

3) Develop a robust industry training strategy for manufacturing and skilled trades but link it to the immigration recommendation in 1). Stream new immigrants right into the NBCC and roll in language training.

4) Tie long term industry development goals with the people strategy. For example, if NB wants to develop a cluster of IT animation firms, or language translation firms, or aircraft maintenance or whatever, it should bring online new streams of talent on an annual basis to feed these targeted industries.

5) Attract more foreign students into the post-secondary education system – but not the rich ones. The ones that need to work part time and through the summer. This should bolster the workforce needs at the retail and services level.

In conclusion, instead of the endless claptrap coming out of the politicians on this issue, someone needs to come forward first identifying the seriousness of the problem and second proposing a concrete, well funded and well resourced plan to deal with it.

The lowest unemployment rate in 30 years doesn’t sound so ‘special’ now does it?

Maybe you’ll now think twice when you hear it repeated daily during the election.