The myth of the skilled immigrant (?) Leveling the playing field

The new Census figures on immigration out this week were not that surprising.  It confirms what we have been seeing – that New Brunswick’s urban centres are attracting more immigrants but having some trouble retaining them.

The more interesting data will come in late November (hopefully) when we see immigration by industry and occupation.  We are told that Canada only focuses on high skilled immigrants and that the points system favours those with a lot of education and skills.

Of course this flies in the face of actual data.

Take a look at the following chart from the 2011 National Household Survey.  This shows the ratio of immigrant workers to non-immigrant workers in Toronto (and Moncton as well).  You will see that Toronto’s highest concentration of immigrant workers -relative to non-immigrant workers – is the the lower skilled and mostly lower wage industries such as transportation and warehousing, administrative services, and other services.  There is a very high concentration of immigrant workers in Toronto’s manufacturing sector – but that sector is not necessarily high wage – the average annual salary in Ontario’s clothing manufacturing sector is $34,000, food manufacturing $40ish, metal manufacturing around $55k (in 2016).

The point – that I have been making for a long time now – is that the larger urban centres have been attracting immigrant workers into sectors where they are needed and smaller urban centres are more constrained to the concept of the ‘high skilled’ immigrant.

I’m hoping the 2016 immigrant data will show we are flowing more into the sectors where workers are needed in New Brunswick.

nhsimm

 

I’m a big fan of Herb Emery, the UNB economics prof – but I think – based on the article in the newspaper – he may be sending the wrong message.  His report concludes that policies to attract more immigrants won’t cause the growth of the economy.  His report is actually based on a pretty discrete chunk of data.  It is an important part of the conversation but I have a few counterpoints.

1.  How would he explain the fact Manitoba has the fastest GDP growth among the 10 provinces in recent years – and a massive increase in immigration?  How would he explain that the head of immigration said that a large share of these immigrants are going into the province’s business services sector – the only province with overall growth in that sector?

2. How would he explain the fact that the largest urban centres in Canada right now are driving employment growth across the country -and still attracting the lion’s share of immigrants?

To suggest that causality runs only one way is mistaken.  Export-based jobs will attract migrants leading to increased local demand and more jobs.  We agree.  But tightening the labour market to the point that employers decide not to expand in your community is an increasing risk.

I guess the common ground here is that I am not advocating we boost immigration without a plan.    As I have outlined elsewhere we need to fill empty jobs first – particularly in export-based industries.  We need a more intelligent approach to immigrant investment.  We should boost immigrant numbers in our PSE that align with our growth sectors such as cybersecurity and insurance.  This will send a strong signal to the national and international firms already here that the talent pipeline is expanding.

But I also maintain that immigrants themselves create demand.   Depending on the economy, 70% of all jobs are based on local demand.  If the population or overall wage growth is not strong – this dampens local demand.

It’s seems like we are left fighting the same old, tired battles we have been fighting for years.   I’d rather flood New Brunswick with immigrants and just see what happens rather than constrain immigrants and watch the provincial economy slowly dry up.  The worst case many of these immigrants move on to Toronto.  If so, who cares?  The best case many of them stay and help us build our economy.

Which side of the argument are  you on?

 

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2 Responses to The myth of the skilled immigrant (?) Leveling the playing field

  1. Danny D'Amours says:

    Completely agree with your view David. I was left scratching my head after reading the article in the paper as well.
    My understanding of the study (solely from the article) is that it revealed that people who moved back east didn’t make more money than those who had stayed. I certainly wouldn’t have expected that people who have gone and come back would be seen as more valuable as those who stayed. Jumping from this short term stat (which I don’t find surprising at all), to extrapolate that immigrants won’t grow the economy is too big a jump for me.
    The greater the local population, the greater the local demand as well as the larger the labour pool to fill jobs, attract capital and grow the economy. We certainly can’t grow great companies and the economy with the people here.

  2. Herb Emery says:

    Good post and good questions about the argument I have been making about immigrants and growth. The simple answer is that we need to identify what factor is associated with both GDP growth and higher levels of immigration in places like Manitoba and the big cities that is not present in New Brunswick. You can show that this factor is business investment, or private sector investment, that is not only residential construction. Since 2008 New Brunswick as a province has very, very, very low private sector investment compared to the decade prior to 2010 and in comparison to other provinces. So my argument is that to get more immigration, more population and more GDP we need to stimulate privates sector investment in the province. The easy route is to follow Saskatchewan and turn to natural resource development – look at its population growth and reversal of median age increase since 2005 — or look hard at the policies, regulations and tax levels to ensure that the province is an attractive place to invest. Finally, immigration and interprovincial migration are important for reasons other than growth goals. Addressing skills needs and backfilling for out migrants and retirees is critical to keep us where we are.

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