There's some research out from the Conference Board of Canada that raises the question about the impact from the Federal government's push to utilize more migrant workers in Canada's labour markets. This blog post is going to examine the Conference Board's research, briefly overview some of the impacts arising from the Temporary Foreign Worker Program, assess the plight of young Canadians entering the labour market, and then question the logic of the Conservative government's immigration and labour market policy.
The Conference Board's Findings
The Conference Board's research questions the Federal Government's decision to increase the number of migrant workers being imported into Canada's labour markets amid a period of persistent youth un(der)employment in Canada. The critical question posed by the Conference Board is: "if the unemployment rate remains relatively high and so many young and able Canadians are unable to find work, why are we still bringing in so many people under the TFW program?"
The Conference Board raises a number of possible answers to the question: a mismatch in skills; labour market rigidities such as higher jobless benefits or the cost of migrating to a different province; and, employers being able to pay lower wages for foreign workers. I'm going to briefly review each one.
The skills mismatch argument is often bandied about with newly minted HRSDC Minister Jason Kenney tweeting: "I will work hard to end the paradox of too many people without jobs in an economy that has too many jobs without people." I have serious reservations about whether the skills mismatch is a real phenomena in Canada's labour markets or is just a continuing refusal on the part of employers to engage in training or developing their workforces.
The labour market rigidity issue is interesting, but given that the flip-side of rigidity is flexibility it's clear that this isn't much of a problem. Canada is notorious for having shoddy workplace protections and a high degree of labour market flexibility - all of this part of structural adjustments programs undertaken since the 1990s in Canada. The Conference Board raises the issue of jobless benefits, but the idea that large segments of the labour force are living Employment Insurance is simply a convenient fiction parroted by anti-worker zealots. The problem I see is that governments haven't incentivized internal migration to ease the movement of workers from region to region. Also, governments haven't developed labour market or industrial strategies to address the gaps within the labour market with Canadian talent.
The final explanation proffered by the Conference Board - that employers want migrant workers because they can pay them less - is the simplest explanation and the one with the most credibility. Employers not only can get away with paying lower wages, but due to the enormous power imbalance the employer can basically flout any labour laws that they want to. Migrant workers simply aren't in any position to question the actions of their employers because their ability to stay in Canada is linked to their employment - if they get terminated then the government happily deports them to their country of origin - no appeals, no recourse, and of course no rights.
The Impact on Canada's Labour Markets from Migrant Workers
The key to understanding the impact arising from the widespread deployment of migrant workers is understanding how the program has changed over the past decade. Originally, the program was envisioned as a way to bring high-skilled professionals into Canada on a short-term basis, but in 2002 the Liberal government enacted the Low Skill Pilot Project which opened the program to lower-skilled occupations. The Low Skill Pilot Project was made permanent by the Conservative government in 2006, this had the effect of radically changing immigration and labour market policy in Canada via the creation of a sizeable permanent underclass of migrant workers in Canada.
The problem with this strategy is that it seriously distorts Canada's labour markets via wages being depressed, deteriorating working conditions, and employers becoming dependent on migrant workers. Beyond this, the overall bargaining position of workers vis-a-vis capital is decimated as employers can turn to a cheap pool of labour vis-a-vis migrant workers who are simply unable to exercise basic labour rights due to their economic vulnerability and threat of deportation.
Last month I asked Jason Foster about the impact of migrants workers on vulnerable segments of the labour force, he responded by stating: "we have found that the expansion of the temporary foreign worker program has worsened labour market outcomes for new immigrants, Aboriginals, youths, and other groups who traditionally have weaker attachments to the labour market. In other words, those groups are in direct competition with temporary foreign workers for jobs at the lower end of the labour market. The increased use of temporary foreign workers has pushed them to the side to a certain degree, making it more difficult for them to get ahead."
The underlying message from the Conservative government to Canadian workers is: you're vulnerable and replaceable so don't try to assert your workplace rights. Far from being effective economic managers, the Conservative government has attacked the economic prospects of Canada's youths who now have to compete against a new underclass of migrant workers; furthermore, the Conservative government's migrant worker push can also be interpreted as an attack on Canada's middle class.
The Plight of Youths
Paralleling the Conservative government's migrant worker push is the problem of some of the worst youth un(der)employment in a generation. A key factor of the bleak youth labour market is the fact that the Conservative government is forcing youths to compete against 340,000 migrant workers for jobs in the retail, service, and hospitality sectors. Mix in other problems like 300,000 unpaid internships, stagnating wages, the end of mandatory retirement, obscene levels of student debt, and employers implementing two-tiered wage schemes - all of the foregoing being a recipe for a generation facing seriously diminished labour market outcomes and the risk of long-term economic scarring.
Canadian youths face a desperate situation. Precarious part-time work in the retail, service, and hospitality sectors is becoming the new normal for post-secondary graduates - this is a reality that many youths are facing and they don't like it. Beyond that, youth un(der)employment is having damaging effects on the overall economy by hobbling economic growth, reducing overall productivity, and letting valuable young talent sit idle in jobs far below their skill level. The key takeaway here is that until youth un(der)employment receives sustained policy attention we're going to see deep economic scarring destroying the hopes and dreams of a generation.
Sustained Political Inaction
Adding to the desperate plight of youths is the fact that the Conservative government hasn't created enough jobs to keep up with population growth and the jobs that are being created are predominately precarious contract or temporary positions. The Conservative government seems content to continuously repeat the line that there's a skills gap (or alternatively attack youths as being lazy), which is being backed up in official policy and spending with the Canada Job Grant program which appears to be terribly designed and little more than corporate welfare to address a non-existent problem.
Lying beneath the inaction over jobs is the fact that Canada lacks a labour market strategy or any type of long-term strategy aside from resource extraction. Given that most resources are far from Canada's urban centres it's clear that governments need to get creative in spurring economic development in other areas of the economy such as the knowledge and creative economy and the manufacturing sector.
Given the dimensions of Canada slack recovery from the recession, the only sensible course of action for the Conservative government would be to taper off the use of migrant workers until the unemployment rate decreases and the labour market participation rate increases. I doubt this will happen though as the Conservative government is beholden to corporate interests which find the ability to exploit cheap migrant workers extremely useful.
Until we return to sensible immigration and labour market policy Canadian youths will continue to face bleak job prospects. Everyone should be asking about why the Conservatives are abandoning youths over demand from employers for cheap labour? Is Canada's labour market policy appropriate amid a period of extreme youth un(der)employment? Do we need a radical rethink about how we're deploying migrant workers in Canada's labour markets? These are uncomfortable questions, but ones that need further exploration and urgent attention.
Additional Resources
To learn more about the Conservative government's migrant worker push see these articles: here, here, here, here, here, and here. Finally, below I've posted a video of Armine Yalnizyan, the CCPA's Senior Economist, discussing the increased use of migrant workers in Canada's labour market.
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