Tuesday, May 17, 2016

Fun with StatCan labour market data

Despite the beating Statistics Canada took during the Harper years, StatCan still offers all sorts of fascinating information about the labour market that you can customize to a significant degree. What this means is that the average Canadian isn't reliant upon the media for information about the labour market.

For example, CANSIM Table 285-0003 allows you to look at job vacancies by region and occupation. A few minutes of fiddling allows you to see that there were 63,000 job openings in Alberta during Q3 of 2015. 

About half of the job openings (31,070) were in the sales and service occupations. While it is unfair to suggest that anyone could do these jobs, the requirements for employment tend to be low. Not surprisingly, so too is the pay (averaging $12.95 per hour).

You can also look at employment and unemployment rates using CANSIM Table 282-0087. Again, you can fiddle the data to find that there were 162,700 unemployed people in Alberta in September of 2015.

One question that immediately pops into my mind is why are there unskilled positions (in sales and service occupations) available when there are so many unemployed people who could fill them? There are likely many factors at play. For example,  there will also be some unfilled positions due to labour market friction. 

Yet let's just use our common sense. For example, we can all see that jobs that pay (on average) $12.95 per hour are not very attractive jobs. We might still take them (if we were in a real jam) but what other options are there?

Many unemployed Albertans will have access to Employment Insurance benefits. I couldn’t find the September 2015 amount but the January 2016 maximum was $537 per week (assuming your annual salary while employed had been $50,800—otherwise it would be 55% of your salary). 

So, if you could get maximum EI benefits, you would need to work 42 hours per week in an average sales and services job just to generate the same income you could get on pogey. Who would in their right mind would do that?

Commentators on the right would likely suggest that reducing the level and duration of EI benefits would solve that problem (by forcing unemployed to take bad jobs to avoid starving). I wonder, though, if you can’t make an equally good argument that an increase in the minimum wage (or other changes in the terms and conditions of work, given that sales and service jobs are hard work) might be an equally effective way to fill these positions?

The other observation (made by economist Jim Stanford on twitter using the table on the left) is that job vacancy numbers undercut the narrative that Canada suffers from a skills shortage. Nine of the 10 occupations most in demand nationally are low-skill occupations. The real issue appears to be that Canada has a shortage of jobs period.

-- Bob Barnetson

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