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 • • • • • • • 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 _____________________________ The labour market “perfect storm” LATE 60s/EARLY 70s: STAGFLATION _____________________________ 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 • • • • • 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/