A tale of two job markets complicates the labour story

We’ve all heard plenty about Canada’s labour shortage by now, but a new StatsCan report shows that understanding the state of the job market is way more complicated than counting the number of “help wanted” signs. 

Driving the news: There were 856,000 job vacancies in Canada by the end of last year and about 49,000 more people than that looking for work, according to the StatCan analysis.

  • That’s a significantly tighter labour market than immediately before the pandemic, when there were 509,000 job vacancies and almost twice that looking for work.

  • It’s not, however, a labour shortage in the true sense of the term—it still means there are more people looking for work than there are open roles in the economy.

Yes, but: The picture looks very different when you compare jobs that require a high school education or less with those that require a post-secondary degree or skilled trade.

  • There are 359,000 vacant jobs that require at least some post-secondary education and 549,000 unemployed workers who fit that bill, meaning for each job there are around 1.5 job seekers.

  • But for jobs that require a high school education or less, there are 497,000 vacancies and only 366,000 job seekers—a true labour shortage.

Why it matters: The data suggests that Canada’s “labour shortage” is contained to jobs that don’t require post-secondary education—beyond that, the problem employers are facing isn’t really too few workers.

  • That doesn’t mean employers will find hiring people with degrees easy. The skills of unemployed people won’t match up perfectly with what employers are looking for.

  • Plus, regulatory barriers—like strict licensing rules that block some immigrants from working in their field once arriving in Canada—limit the hiring pool.

Bottom line: Insofar as there is a labour shortage in Canada, it’s concentrated in jobs that don’t require higher education. Ramping up immigration of people with post-secondary training, as the federal government is doing now, isn’t going to solve that problem.—TS