the labour market context: the demand side of the equation

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THE LABOUR MARKET CONTEXT:
THE DEMAND SIDE OF THE EQUATION
Presentation by Tom Zizys
From Research to Practice Symposium
March 13, 2013
Outline of presentation
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Changing hiring and promotion practices
Occupations: the hourglass labour market
Broad trends in employment incomes
Post-secondary degree holders
Educational attainment and entry-level jobs
Job-education match
What can be done?
CHANGING HIRING AND
PROMOTION PRACTICES
CAREER PATHWAYS IN A 1950s COMPANY
From “Working Better:
Creating a High-Performing
Labour Market in Ontario”
Metcalf Foundation
THE 1950s CORPORATE STRUCTURE
The labour market “perfect storm”
LATE 60s/EARLY 70s: STAGFLATION
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The labour market “perfect storm”
LATE 60s/EARLY 70s: STAGFLATION
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The “big ideas” matter
FRAGMENTED CAREER PATH IN A 1990s FIRM
THE INTEGRATED FIRM NOW BECOMES THE NETWORKED FIRM
Entry-level jobs not what they used to be
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More casual, part-time and temp work
Wages dropped for entry-level jobs
Drop in minimum wage in real terms
More income inequality (1): intra-firm equity
More income inequality (2): lower status jobs
have less bargaining power
• Less unionization
• Less opportunity for advancement
OCCUPATIONS: THE HOURGLASS
LABOUR MARKET
From study for Toronto Workforce Innovation Group: An Economy Out of Shape: Changing the Hourglass
Comparison of distribution of jobs by
skill categories, Canada, 1996-2006
1996
2006
Comparison of distribution of jobs by
skill categories, Ontario, 1991-2006
Change in employment shares by pay level,
Europe and United States, 1993-2006
IMF, World Economic Outlook, 2011, p. 42
Percentage change in employment share of all jobs,
by skill content, United States, 1981-2011
20%
16.1%
15%
10%
10.6%
9.2%
8.6%
4.6%
5%
1981-1991
0.9%
0%
1991-2001
2001-2011
-5%
-5.6%
-6.6%
-10%
-11.0%
-15%
Non-Routine Cognitive
Routine
Non-Routine Manual
BROAD TRENDS IN
EMPLOYMENT INCOMES
Average incomes, full-time/full-year workers, males and females,
Toronto and rest of Ontario, 1995-2005 (2005 dollars)
Males, Toronto
Males, rest of Ontario
120000
120000
100000
100000
80000
80000
K-workers
60000
Middle jobs
40000
Entry-level
K-workers
60000
40000
20000
20000
0
0
1995
2000
Middle jobs
2005
Entry-level
1995
Females, Toronto
2000
2005
Females, rest of Ontario
120000
120000
100000
100000
80000
80000
K-workers
60000
Middle jobs
40000
Entry-level
K-workers
60000
40000
20000
20000
0
0
1995
2000
2005
Middle jobs
Entry-level
1995
2000
2005
WORKERS WITH POST-SECONDARY DEGREES
Percentage of population that has attained tertiary education,
25-34 and 55-64 year olds, 2009
OECD, Education at a Glance, 2011
Canadian college graduate earnings
(25-64 year olds) compared to other countries
(2010 or latest available year)
Japan 34.7%
Canada
United States
Australia
Germany
Sweden
10.1%
23.1%
13.3%
19.3%
10.2%
16.4%
8.1%
14.8%
10.9%
14.7%
5.0%
United Kingdom
13.3%
OECD average
13.0%
France
At or below half of the median
11.6%
9.9%
13.3%
12.6%
More than 2 times the median
OECD, Education at a Glance, 2011
Canadian university graduate earnings
(25-64 year olds) compared to other countries
(2009 or latest available year)
Canada
United States
Germany
Sweden
17.6%
29.4%
12.8%
30.3%
12.1%
10.9%
France
10.1%
Australia
9.7%
OECD average
9.3%
Japan
8.9%
United Kingdom
7.7%
At or below half of the median
27.2%
14.1%
25.1%
18.4%
26.7%
34.7%
28.0%
More than 2 times the median
OECD, Education at a Glance, 2011
Share of college and university diploma and degree holders,
by occupation, Canada, Ontario, Toronto CMA & Toronto, 2006
JOB-EDUCATION MATCH
Job-education match, by education level, Canada, 2006
80%
68%
70%
60%
60%
54%
50%
40%
30%
Closely related
Somewhat related
28%
Not-at-all related
20%
20%
12%
10%
0%
Non-university postsecondary certificate
University degree or
certificate, bachelor's
or below
University degree,
above bachelor's
Statistics Canada: Survey of Labour and Income Dynamics, 2006
Mean hourly wage by education level
and job education relatedness, Canada, 2006
$40
$37
$34
$35
Mean Hourly Wage ($)
$31
$30
$25
$20
$23 $22
$29
$24
$22
$18
$15
$10
$5
$0
Non-university
postsecondary
Closely related
University, Bachelor's or
below
Somewhat related
University, above
Bachelor's
Not at all related
Statistics Canada: Survey of Labour and Income Dynamics, 2006
WHAT CAN BE DONE?
A strategy with three dimensions
Employer practices
Workforce development → increased productivity
→ better jobs → higher pay
• Overwhelming evidence base exists for the
business case for workforce development
• Numerous measurable indicators: turnover,
absenteeism, recruitment costs, productivity,
value added, firm survival rate, innovation
• Enhance management and HR competencies
→ Good literature reviews: NCVER; UKCES
Enabling environment
The information, the networks and the processes
needed to make workforce development happen
• Data and analysis: Survey of Labour and Income
Dynamics; Canadian Council on Learning; Canadian Policy
Research Networks
• Model practices: Developing a toolkit based on research
and pilot projects
• Intermediaries: Workforce development boards; unions
• Sector strategies: value of sector councils
• Linkages: workforce development to:
→ productivity → innovation → economic development
Norms & values (1)
A deliberate paradigm shift
• The value of government
• Evidence-based policies
• Tackling inequality
 Pre-distribution (flat median wage; increasing wages at top)
 Income tax; EI coverage; drawing attention to tax avoidance
• Restraining shareholder value
 Reaffirming other obligations: to economy, to employees, to
community
 Incentives for longer-term investment (shares; bonuses)
 Slowing the rate of transactions (Tobin tax)
Norms & values (2)
Privileging good workforce development practices
• Features: permanent jobs; workplace training;
career advancement; unions; apprenticeships;
experiential learning; paid internships; gender
equity; living wage
• Using government procurement as lever
• Celebrating top workplace practices
• Child care
• International agreements: raising the bar on labour
practices; corporate taxation
QUESTIONS?
DISCUSSION
Tom Zizys
tzizys@rogers.com
Metcalf Foundation
http://metcalffoundation.com/publications-resources/view/working-better-creating-a-high-performing-labour-market-in-ontario/
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