Stranger Things: New Brunswick labour market edition

Statistics Canada recently published a report stating that the growth in paid employment in New Brunswick is highly correlated to the growth in the working age population.

Quelle suprise.

The article seems to imply the causality is one way.  If you have lots of jobs, the people will come to the jobs.  If you lose jobs you will lose people.   But as I have pointed out before there are jobs that have that magnetic effect and jobs that do not.  New Brunswickers will move to Alberta for $100k+ jobs but are less likely to move to Alberta for minimum wage jobs.  So, Alberta has boosted the number of immigrants in recent years and many of them are going into services and other jobs that it would be hard to get people from the rest of Canada to move there to take.

The truth is that there are a lot of jobs in New Brunswick right now that are going unfilled or that are really hard to fill.  These are not ‘magnetic’ jobs – for the most part Canadians will not move to a community to work in a fish plant, a <$15/hour manufacturing facility or customer contact centre and a host of personal services, retail, food and accommodation jobs.

This is what puzzles me about the CBC article.  It quotes one of my favourite migrants – Dr. Herb Emery as follows:

“Whereas, governments are increasingly focused on adding people first and hoping that that will drive labour demand by potentially driving capital in or unlock business potential where there’s perceived labour shortages, this study really points to the fact that it really is labour demand which ultimately comes from the export sector, which is driving everything,” he said. He pointed to examples of government strategies to bring more people to Atlantic Canada, like the Atlantic Immigration Pilot, that is aimed at bringing more immigrants to the region to stimulate the economy.

Emery knows full well the Atlantic Immigration Pilot was set up specifically to deal with existing and real labour demand not primarily to bring in people willy nilly.  In fact, the AIP’s explicit purpose is to avoid bringing in immigrants without a job and economic prospects.

The fact of the matter is that we have anecdotal and statistical data showing a decline in employment in many export-focused sectors because of a lack of workers.  I just heard this week that one of the larger foreign-owned fish plants is close to shutting down because their TFW allocation is down to 15% of the workforce and they are really struggling to fill the other 85%.  While the jobs are not high paying by any stretch and they are hard work too – if that plant shuts it will have a seriously negative effect on that local community.

This is the definition of labour demand.  Now, there is a good point about productivity and efforts to drive up wages.  This is good but not at the point it pushes firms and their export revenue out of New Brunswick.

Dr. Emery is right when he says:  “What we could be doing is focusing on making business conditions in New Brunswick more favourable for investment, which really means that even at whatever the world prices are for lumber, timber, fish, whatever we’re going to produce, that our producers are competitive”.

If we increasingly can’t fill the jobs on offer it will (and is) have a dampening effect on the economy.  We can wait around for mining and higher high wage jobs to come back to New Brunswick but I’m not willing to sit around and do nothing.

Bring in immigrants.  If some leave so be it.  As I have said many times before human capital is starting to look a lot like financial capital.  If it becomes too scarce it is a barrier to growth.

 

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