The Demand for and Supply of Skills

March 21, 2014
Jock Finlayson

BCBC is pleased to partner with CKNW in their Putting BC to Work programme. Over the coming weeks, we will be highlighting issues and opportunities in British Columbia's labour market both on air and here on our blog. On April 24th, we will be holding a wrap up event featuring Canadian Economist, Don Drummond. Tickets and details here.

One of the puzzles in the contemporary Canadian labour market is the co-existence of skills shortages in some regions and occupations along with an unemployment rate hovering near 7% as well as mounting evidence of significant “under-employment” among many workers – particularly young adults. This situation suggests there are labour market imbalances, and that they appear to be growing larger over time. Many Business Council members tell us that British Columbia is experiencing mismatches in the demand for and supply of skills.

The principal source of new labour supply is students coming out of education and training institutions and programs; immigration is a second important source of new workers. Most graduates seeking to enter the job market in Canada have completed some kind of post-secondary education – either a bachelor’s degree (the most common PSE credential) or else a college, apprenticeship or other technical training qualification. A small proportion of job market entrants have completed masters or doctoral degree programs.

According to a recent federal government report, Canada leads all advanced economies in the share of the 25 to 64 year old population with some form of post-secondary education. In 2011, more than half of all Canadians in this age group had a post-secondary credential, compared to an average of slightly more than 30% across all industrial countries. Among Canadians aged 25 to 34, almost 60% have a post-secondary credential.

Canada Leads in Overall Post-Secondary Attainment
(% of 25-64 year old population with a post-secondary education, 2011)

That’s the good news. Where Canada trails many peer countries in providing education and training is in two other key areas. (See Government of Canada, Jobs Report: The State of the Canadian Labour Market, February 2014; released in conjunction with the 2014 federal budget.)

First, we have a notably lower proportion of university graduates in science, technology, engineering and mathematics (STEM) disciplines, when measured relative to the size of the 25 to 34 year old population. On this metric, Canada is behind not only the Scandinavian countries, Israel, Germany, Austria, Switzerland, Korea and France but also the UK, Portugal, Spain and Italy. This gap is partially made up by the fact that Canada’s college system – separate from our universities – produces a fair number of people with STEM qualifications. Still, the shortfall in university STEM graduates is concerning.

Second, Canada trails many European countries in the proportion of workers with apprenticeship-related qualifications. The share of young adults enrolled in apprenticeship training in this country is small; out of every 1,000 employed Canadians, the number of apprentices stand at about 25, compared to 30-40 in Germany, Austria, Australia and Switzerland. Moreover, only half of Canadian apprentices actually complete their programs -- one of the lowest graduation rates among all industrial countries. This suggests there are significant weaknesses in the existing apprenticeship training system. Canadian policy-makers would be wise to consider re-tooling and expanding apprenticeship-based education and skill training programs as they look for ways to address the problems posed by current and expected labour market mismatches.

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