by Philip Cross
Fraser Institute
August 04, 2014
Analysis
Does Canada’s economy suffer from labour shortages? Business leaders say yes; economists are more skeptical. Employers, drawing on their experience with shortages before the recession, have been more innovative in adopting strategies to increase labour supply. Economists note that the track record of predicting shortages based on the need to replace retirees is poor: Europe today is an excellent example of an older society without a shortage of labour. The next point is the existence of a record gap between unemployment for adults and youths. The reasons for the high level of youth unemployment partly reflects the skills youths have acquired, especially their marked shift from community colleges to university education over the past decade. Finally, national wages have not accelerated markedly due to lingering slow growth in central Canada. This masks a clear upturn in wages in most Western provinces and in Newfoundland.



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