The Labour Market

[Arthur Dailey]

As per my post, the conclusion is self evident. But the 'why', with respect to the employers, was my question. I suspect it is because employers would rather make the assumption that many short term employment stints reflect the demand for the individuals talent, rather than superficial vapid ambition.

A large number of corporations adopted the 'move up or move out' strategy.

Assuming that an employee's skill level or performance peaked within one year of being hired, they would rather 'move out' workers than provide them with annual pay increases, when newly hired and lower paid workers could perform 'just as well'. Wal-Mart was a strong advocate of this type of employment relationship.

It doesn't differ much from the Victorian/early 20th century owner/corporate strategy of getting rid of older workers as their bodies started to break down and replacing them with younger and 'fitter' and lower paid workers.

That is one reason why unions put such an emphasis on 'seniority'.

[Fredk]

Another take on kids today...

Edit: Wrong link.

[xrox]

A large number of corporations adopted the 'move up or move out' strategy.

Assuming that an employee's skill level or performance peaked within one year of being hired, they would rather 'move out' workers than provide them with annual pay increases, when newly hired and lower paid workers could perform 'just as well'. Wal-Mart was a strong advocate of this type of employment relationship.

It doesn't differ much from the Victorian/early 20th century owner/corporate strategy of getting rid of older workers as their bodies started to break down and replacing them with younger and 'fitter' and lower paid workers.

That is one reason why unions put such an emphasis on 'seniority'.

I was speaking of employee driven moves with no time for skill development, and why a new employer would reward this person. So you are saying that this dynamic is spurred by the new employers desire to pay less? But why the upward mobility then? If you are willing to hire someone with no experience in role, why look for, and reward someone, with superficial experience?

In my wife's experience with this, it is called "being dynamic". Employers are looking for diversity of experience, with less emphasis on skill and competence.

[Arthur Dailey]

I was speaking of employee driven moves with no time for skill development, and why a new employer would reward this person. So you are saying that this dynamic is spurred by the new employers desire to pay less? But why the upward mobility then? If you are willing to hire someone with no experience in role, why look for, and reward someone, with superficial experience?

In my wife's experience with this, it is called "being dynamic". Employers are looking for diversity of experience, with less emphasis on skill and competence.

Perhaps I misunderstood your response? Or am only stating the obvious below?

'Move up or move out' means that those who are deemed worthy of promotion are retained and 'move up'.

Those who are not, are 'moved out' rather than staying and receiving the benefits of seniority. That is because their employer considers their roles to be 'low skill' and easily mastered in a short period of time. So a new(er) employee would be in theory just as productive in that role as someone with experience.

De-skilling jobs was one of the great benefits to employers of the assembly line process.

The Industrial Revolution originally resulted in a massive societal divide. The working class lived in squalor, with limited life spans. One wonders if the same will develop as AI displaces more and more existing occupations/jobs?

[Arthur Dailey]

The labour market and how it is addressed is a key issue regarding economic prosperity and livability/affordability in this country.

Just recently Lululemon received approval from Ottawa to hire up to 2,600 foreign workers, for 'skilled' positions, Despite the fact that StatsCan itself has determined that there is no shortage of these types of workers and that the shortages are primarily in regards to 'lower skilled' roles.

And Lululemon started the process for this approval in 2016, prior to the pandemic and our high employment/low unemployment situation.

Ghada Alsharif – The Star – June 2, 2023

The federal government has agreed to exempt Vancouver-based yoga apparel giant Lululemon from immigration rules that limit access to foreign workers, allowing the company to rapidly expand its headquarters in the city.

The athletic apparel company can now hire foreign workers for “high-skilled occupations” — which includes senior managers, construction managers and manufacturing engineers — without applying for a Labour Market Impact Assessment (LMIA) approval.

The LMIA demonstrates that there is a need for a foreign worker to fill a job because no Canadian worker or permanent resident is available to do it.

The move effectively allows Lululemon to hire foreign workers at a faster pace as the company aims to create more than 2,600 jobs, according to a statement last week from Immigration, Refugees and Citizenship Canada (IRCC).

Lululemon has been seeking the exemption since at least 2016.

The foreign workers hired by Lululemon under the exemption will be granted employee-specific, closed work permits, IRCC confirmed in an email.

A closed work permit means that the status of a worker is tied to one employer as a condition of their work permit, making their position more precarious.

The IRCC said that the only other time the exemption was granted was in 2014 when the federal government allowed Microsoft Canada to bring in an unspecified number of foreign workers to British Columbia as trainees without LMIAs.

A Statistics Canada report published last week found that there are no labour shortages for jobs that require high levels of education, suggesting other factors, such as a mismatch in skills and pay, might be to blame for a high number of empty positions. For positions that required a high school diploma or less, the shortage of workers only started in the third quarter of 2021.

The Globe and Mail editorial board published an editorial (excerpts below) n yesterday's Globe related to the labour market and the artificial 'adjustments' that Ottawa has introduced rather than allowing the labour market to balance itself.

Canada’s much-touted labour shortage is mostly a mirage
The Editorial Board of The Globe & Mail – June 1, 2023

Basic economics says that the price of something should rise if it is in short supply. But wages – in the middle of what business groups tout as an unprecedented labour shortage – have not even kept pace with inflation, and fretting over a labour shortage has mounted. Average hourly earnings have fallen since January, 2020, once inflation is taken into account. Translation: Businesses may be moaning about a labour shortage, but they aren’t willing to put their money where their moans are.

Another clue that claims of a widespread labour shortages aren’t quite what they seem came in a Statistics Canada report last week that looked at job vacancies, which were 2½ times greater in 2022 than in 2016.

There were stark differences in the rates, depending on a job’s education requirement. For positions requiring at least a bachelor’s degree, there was no general labour shortage.

But there were a large number of vacancies for jobs that only required a high-school diploma, or less. For those lower-skilled jobs, there were many more vacancies than unemployed workers. Even if all those workers were instantly hired, there still would have been 131,000 vacancies in the fourth quarter of last year, for instance.

Despite that apparent shortage, wages are not rising in response.

The heart of the answer is the rise in the number of temporary foreign workers who are willing to work for cut-rate wages and are not as able to shift jobs nearly as easily as Canadian residents. The number of such workers has exploded since the pandemic, jumping to 120,000 at the end of 2022 from 73,360 at the end of 2019.

Then there is the less-than-pleasant nature of some low-skilled workplaces, where low pay and high turnover go hand in hand. Economist Jim Stanford says some employers likely find it more advantageous to deal with high turnover than pay their staff enough to dissuade them from quitting.

Still, there’s no doubt some employers are struggling to find workers – and are pressing the federal government to boost the number of temporary foreign workers. Ottawa has bought into that narrative wholeheartedly: The immigration department referred to chronic labour shortages as the justification for revised rules rolled out on Wednesday.

That narrative obscures an uncomfortable reality in which the rapid increase in temporary foreign workers is little more than a subsidy that allows firms to avoid paying higher wages – and, just as bad, reduces the pressure to invest and innovate to adapt to the needs of today’s labour market. In turn, that dampens productivity growth.

And today The Globe also published an article regarding the employment/economic status of recent immigrants.

Matt Lundy – The Globe & Mail – June 2, 2023

Canada’s labour boom is creating plenty of opportunities for a group that, at times, has struggled to find work: recent immigrants.

Of late, the employment rate for recent immigrants – those who landed in Canada within the past five years – has topped 70 per cent, the strongest level on record. Just a decade ago, it was about 10 percentage points lower.

“In the last 10 to 15 years, new immigrants are doing really, really well,” said Feng Hou, a principal researcher at Statistics Canada,

Mr. Hou said the biggest factor in the employment surge is that Canada has increasingly moved toward a two-step immigration process. This means that a larger share of people who become permanent residents have already worked in Canada as temporary residents.

In 2018, for instance, almost half of adult economic immigrants had previous earnings in Canada, up from just 8 per cent in 2000.

In many cases, people have lived in Canada for years and have established careers when they’re granted permanent residency, the stage at which they become a “recent immigrant.” This helps boost the employment numbers.

But the pay trajectory can be grim for immigrants who worked in low-skilled jobs as temporary residents. “The starting point matters,” read a 2018 study co-authored by Mr. Hou.

For instance, the Temporary Foreign Worker Program was overhauled last year, in part so companies could fill a greater proportion of their jobs with low-wage foreign labour. The federal government has also temporarily removed a limit on work hours for international postsecondary students.

Canada’s population grew by more than one million last year, largely because of new temporary residents such as international students.

A shortage of housing, combined with this surge in demand, is leading to exorbitant costs. In many cities, rents have risen more than 20 per cent in the past year alone.