Home > Americas, Canada, Economics > Canada: The Strange Economics of Temporary Foreign Workers

Canada: The Strange Economics of Temporary Foreign Workers

Andrew Jackson writes in Relentlessly Progressive Economics:

Yes, there are labour shortages in some regions and occupations (especially the skilled trades and many health care occupations) but there is no evidence of a generalized labour shortage. Outside of Alberta (and some other parts of Western Canada) , real hourly wages are basically flat, and the proportion of lower paid adult workers is not falling. If there were truly a tight overall job market, it would surely be registered in rising real wages. Moreover, we know that there are a lot of skilled workers being displaced from industrial jobs in central Canada. Employment rates are actually falling in Ontario and Quebec because of the industrial crisis. (Today’s paper alone tells me of big layoffs at Chrysler and Nortel.) And a lot of workers who are under-employed relative to their skills (eg many recent immigrants and young people leaving the education system.) In short there is a lot of positive potential to deal with specific regional and occupational shortages through investments in training and support for labour mobility, and I flagged some changes to federal programs, especially EI (Employment Insurance), which could help.

In the following discussions, the dominant employer response was to argue that labour shortages are serious and urgent, incuding at the lower skill end of the spectrum, and that the best way to deal with them is by ramping up the temporary foreign worker program. The quick fix is to bring in foreign workers asap (and, though this was unsaid, to ship them home when no longer needed.) Problem solved, with no need to improve wages and working conditions, let alone invest to boost skills and to raise productivity.

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Categories: Americas, Canada, Economics
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