The Ottawa Citizen Online
Saturday, April 24, 1999

LOCAL BUSINESS

Federal researchers see no skills shortage

Eric Beauchesne
The Ottawa Citizen

Researchers say Canada is not suffering from an undue shortage of
skilled workers and that very little unemployment is due to a mismatch
where jobs go begging because the jobless don't have needed skills.

Those are among the widely held perceptions challenged by studies,
including two by federal researchers, at a conference on unemployment.

"Results from surveys of employers often suggest that skill shortages
have reached dramatic proportions in Canada," notes a research paper
by analysts with Human Resources Development Canada. But they
conclude: "There is no reason to believe that, globally, Canada is
suffering from a broad-based shortage of skilled labour or that its
workforce cannot fulfil the economy's needs."

And they explain away complaints by businesses as stemming from the
"normal" shortage that occurs during any economic expansion.

"The existence of labour shortages is as inevitable as the existence
of unemployment in modern economies."

Further, they suggest there's no reason to increase government
incentives. "The incentives to educate and train in Canada seem high
enough since, as we have shown, Canada registers a rate of investment
in education and training greater than that of most other
industrialized countries.

"Consequently, Canada's current stock of human capital also compares
favourably to other nations."

Among the evidence offered for their conclusion that there is not a
serious shortage of skilled labour is that there has not been a surge
in wages for the highly skilled.

"This is not to say that there is no room for improvement, or that
everything is working smoothly," the report concedes. "To function
adequately in today's labour market, a high school diploma is strongly
recommended."

But it recommends that the young be encouraged to finish high school
and that assistance be given to help the least educated learn to read
and write.

Underscoring the findings of that federal research paper is another by
economists from the private sector and Statistics Canada that
challenges another widely held view: that a mismatch of skills and
jobs is a major reason Canada has been unable to reduce its jobless
rate further.

"The best evidence is that less than one-eighth of the national
unemployment rate could be due to a structural mismatch between the
skills demanded in available jobs and the skills possessed by the
unemployed," it concludes. "In a dynamic economy, some sectors are
always growing faster than others, and have the growing pains to
match," it notes, echoing the findings of the HRDC researchers.

One of those sectors is high technology, but that "sector is very
small as a proportion of total employment."