EI, temporary foreign workers, and business closures

I have a simple question for you.  Under which of the following scenarios is a local community better off:

1. A local manufacturing company can’t find workers even though the unemployment rate is 20%+ and closes the plant and moves to Eastport, Maine.

2. A local manufacturing company uses temporary foreign workers (and ultimately converts them to residents) and does not move the plant to Eastport, Maine.

 

This is not an academic question.  It happened this week.

Now, I suspect there would be folks lined up to tell us everything that was wrong about that firm – low wages, not appealing work, etc. but the bottom line is that a manufacturing firm could not find 20 workers or so in an area with a 20% unemployment rate and an employment rate of around 40% (i.e. only 2 out of every five adults has a job).

Back to my question.

Under the first scenario, the firm leaves and takes away all the labour income, supply chain spending, spending on real estate, etc. and the taxes that come with it.  And very few locals lose their jobs because they weren’t working anyway.

Under the second scenario, the firm continues to pay local labour income, supply chain spending, real estate, taxes, etc.

 

I think this is going to become a major issue in the next few years.  There is a cohort of firms in this province that do not pay high wages – in the $11-$15/hour range for production workers – and with business models that likely collapses at $20/hour.  The federal government is essentially starting to say they must recruit from the local market if there is high local unemployment.  If they close their doors and move to Eastport, Maine?  Too bad.

How many jobs are at stake?  I have no idea but if you include fish plants, etc. I suspect it would run into the several thousand direct jobs.

At one level this is an existential question.  Do we even want $11-$15/hour production jobs at all?  They have all but disappeared in Alberta and Saskatchewan.  But what is the alternative?  We have tens of thousands of adult New Brunswickers with less than high school education.  Almost half the adult population falls below level 3 literacy levels.  Where do you want them to work?  Computer programmers?

The feds would prefer they move to Estevan or Fort Mac where many could get a good job even with their limited education.  But that doesn’t do much for the local communities back here in New Brunswick.

For generations, other provinces have used immigration as a way to fill jobs ‘Canadians’ didn’t want – taxi drivers, front desk clerks, cleaners, nannies, production workers.   But what happens when the “jobs Canadians do not want” occur in areas with 15% or 20% unemployment?

Just about everyone -even most politicians – will tell me off the record that the solution involves a stronger clamp down on EI usage and on the underground labour market but publicly most politicians in New Brunswick will complain about even the limited EI changes put in place in the last few years.

I think we have to figure out to reinstate a culture of work in this province.  To get to the full time, full year  and employment rates found in places like Alberta and Saskatchewan, we would need to see 60,000 more people working today across New Brunswick.

We should do as much as we can to get those 60,000 working but if they won’t we should definitely look at immigration as an alternative to businesses closing their doors.

 

 

 

 

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