Wednesday, October 22, 2014

Another lousy employer "study" about the "labour shortage"

The Alberta Chambers of Commerce (the umbrella group for the local Chambers) has recently released a study: Alberta businesses share their stories: A survey on the impact of the Temporary Foreign Worker Program in Alberta and recent changes

Before delving into the content of the study, a quick look at its methodology worthwhile. There is no clear explanation of the methodology used in the Chambers’ study but it looks like the 26,000 businesses associated with local Chambers of Commerce were asked to fill out an online survey. Responses came from 47 communities.

The decision to collect feedback from anyone interested (rather than a random sample of businesses) creates the spectre of respondent bias. Basically, those who responded are likely to be different from the overall population (specifically, they are likely to be those businesses most affected by the program and changes in the program). What this means is we should be skeptical that the data and  comments reflect the experience of all 26,000 Chamber members.

This matters because the survey uses language like “58% were either very likely or somewhat likely to reduce their hours of operation”. The survey very carefully indicates that this result reflects the views “of the businesses surveyed” but this nuance (i.e., that these businesses’ views likely don’t reflect all the views of all businesses) is never really explained and is easily lost to causal readers. The take-away becomes “58% of businesses are going to shorten hours”.

We should be further skeptical because the Chambers provides no information about how many businesses responded (47? 470? 4700?) and no information how they selected the comments they reproduced. Are these comments representative of the (non-representative) responses the Chambers received? Or were the selected to support the Chambers’ views on temporary foreign workers? There is no way to tell.

To be fair, sometimes circumstances mean one has to use the data that is easily available. That is not the case here. The Chambers is a sophisticated organization with the resources (~$30k) to do a proper survey that would give representative results. The lousy methodology and absence of info about the study means we should likely disregard this study altogether—it is basically garbage.

Turning to the results, the gist of the comments is that businesses cannot attract enough workers who are Canadian residents and, without access to more TFWs, their businesses are in jeopardy. This may well be true.

At the risk of sounding heartless, is that a bad thing?

Access to workers basically comes down to wages and working conditions. Raise wages and/or improve working conditions enough and workers will come—either from other businesses or from the ranks of people who were previously uninterested in working.

Not every business can afford to do this. But, in a free labour market, a business that cannot afford the cost of inputs (e.g., labour) goes out of business. That is unfortunate, but that’s how it goes. This frees up the workers from the defunct business to take employment elsewhere.

Yes, we may not be able to get a burger or coffee on every corner and in every hamlet at 3 am on Sunday morning. But I expect life will go on regardless.

Mostly this report is part of a broader narrative that employers are trying to create that advocates for government intervention to suppress wages by loosening the labour market via easier access to foreign workers. Given how poorly done it is, we should simply ignore it as more partisan lobbying by employers to grind workers' wages.

-- Bob Barnetson

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