Shaping Labour Market Trends

Demographics: Shaping the Composition of the Work Force

A wide variety of demographic factors influence the composition of the labour force. Various combinations of age, gender and immigration in the population can cause subtle or sharp shifts in the supply of workers. Other agents of change, such as labour laws and equity legislation, will also contribute to the composition of the labour force.

Labour Market Supply

The supply of workers to fill the jobs in the labour market can be directly related to three factors.

• Birth rate. Canada's birth rate is below replacement level.
• Labour force growth. Canada's population is aging, and both the rate and the absolute level of increase in the labour force will continue to slow down (Figure 4).
• Rate of immigration. Workers from other countries often fill gaps in the labour supply. Immigration can minimize the population decline, but cannot realistically offset the shifting age structure of Canadian society.

Gender

The gender composition of the labour force has a major impact on labour supply. It has been predicted that, while the combined labour force participation rate will grow gradually, the rates for men will decline and the rates for women will continue to rise. In fact, almost two thirds of the total labour force growth resulted from the increased participation of women, especially those in the 35-to-54 age group. In 2000, 47% of the labour force is women, compared to 27% in 1961, and 61% of all women are working or looking for a job. The gender of work force members can influence the number of part-time workers and absenteeism depending on family status and culture. Who stays home when the children are sick? Who works part time in order to care for the home, children or elders?

Age

The average age of the labour force has risen from 32 in 1971, to 37 in 1990 to 39 in 2000. The total labour force grew by 15% in the 1990s, while the participation of those aged 35 to 44 grew by 30% and those aged 45 to 54 by 55%. The age pattern of the population affects the number of graduates from different levels of education/training programs, and the number of graduates has a direct impact on the labour market supply (see Figure 18 in Chapter 6). Once in the labour force, the age of the worker can influence the expectations of management, the compensation demands of workers, the hours of work and availability of workers, company loyalty, and the skills and attitudes workers may have. The aging population in Canada results in an aging labour force, leading to an increase in retirements which has a major impact on the availability of workers for the labour market.

Immigration

Historically, Canada relied on an abundant supply of highly skilled immigrants, primarily from European countries, to meet its labour needs. Forty years ago more than 80% of Canada's immigrants came from Europe or European heritage countries, whereas now the bulk of immigrants come from Asia, Africa and Latin America. The majority of immigrants from Canada's new source countries do not have English or French language ability and many, especially those admitted on humanitarian grounds, arrive without the educational or technical skills needed by the Canadian labour market.

Countries Compete for Immigrants Canada's demand for highly skilled workers is increasing. For many industries, many of their workers are coming into retirement. These industries are desperately trying to determine how to capture a supply of highly skilled workers to boost these declining numbers. Skilled immigrants can be a quick way to build the work force supply, depending on government immigration policies. But are highly skilled immigrants lining up to enter Canada? Not according to an Ottawa Citizen article by Colin Grey (Nov. 3, 1999). Grey quotes Michael Walker of the Simon Fraser Institute: "There's going to be an increasingly common phenomenon that we are not going to be able to get these people because we're not the only ones looking for them." The growing global competition has broadened to include rivalry for highly skilled immigrants. Not only are we competing with the United States and other countries for professional workers, but it is becoming more attractive to these potential immigrants to stay in their native countries as global competition invigorates the economy in many of these countries. This reality will stimulate Canadian businesses and government to come up with creative ways to solve the labour supply problem.

From figures four to six, the practitioner can make some observations about the composition and size of the labour force.

• Figure 4 shows that the labour force will grow at a slower pace than the population starting in the year 2010.
• Figure 5 shows that immigration is the major source of population growth.
• Figure 6 shows that older workers will account for a larger share of the working-age population.

Together, these data tell a practitioner that, as the 21st century unfolds, the ratio of workers to population will diminish (Figure 4). In other words, there will be a relative scarcity of workers and fewer young people than before in the job market. This could mean a potential lowering of the unemployment rate and potential pressure for a rise in salaries.

The work force is aging (Figure 6), which has an effect on worker health and on rates of retirement. The problems immigrants face on entering the work force, such as recognition of training and education qualifications, their lack of Canadian experience and language barriers, have to be dealt with quickly and effectively. These people are the major source of the population increase (Figure 5) and, therefore, a major source to fill the positions of retirees.

Designated Group Members

The inclusion of groups that have been formerly kept out of the labour market, or the exclusion of certain groups formerly included, will have an impact on the number of workers and types of skills available to those hiring employees.

For example, the inclusion of more persons with disabilities is bringing about a change in the work environment and in workplace attitudes. These changes affect hiring procedures and re-arrange the fabric of the labour force. If Canada is to have a labour force skilled enough to compete in the global economy, it must make effective use of all available human resources. Regulations need to be constantly reviewed and improved to help employers identify and eliminate barriers to employment for designated group members: Aboriginal peoples, persons with disabilities, visible minorities and women.

However, the state of the economy, to some extent, controls the pace at which employers can implement equity programs. Downsizing and hiring freezes during a recession make it difficult for companies to make extensive changes. As markets open up to competition, companies adjust to survive. Two of their possible strategies can lead to a reduction in personnel: mergers and the creation of new companies with smaller and more highly qualified work forces. As companies succeed in competing and contribute to growth in the economy, more opportunities for employment are created. Increased assets then allow companies to reinvest in their human resources.

Federal Labour Law: The Employment Equity Act

Labour laws are directed toward governing relationships between employers and employees, and have a direct impact on the makeup of the labour force. One of the most influential pieces of legislation is the Employment Equity Act which touches all aspects of the labour force: composition, training and values. The purpose of this enactment is to achieve equality in the workplace and to correct conditions of disadvantage experienced by certain groups.

In addition to the social benefits, employment equity programs are seen by many to be good economic policy. A representative work force that makes full use of available skills, talents and abilities contributes to the effective functioning of the economy.

The first Employment Equity Act was passed in August 1986 and the Legislated Employment Equity Program was set up within Employment and Immigration Canada to administer, implement and monitor compliance. At that time, the Act covered federally regulated employers with 100 or more employees. By 1995, the revised Act covered every employer in public and private enterprises. The Act calls for every employer to implement employment equity by:

1. identifying and eliminating employment barriers (against persons in designated groups) that result from the employer's employment systems, policies and practices that are not authorized by law; and
2. instituting such positive policies and practices, and making such reasonable accommodations as will ensure that persons in designated groups achieve a degree of representation in each occupational group in the employer's work force that reflects their representation in
   1. the Canadian work force, or
   2. those segments of the Canadian work force that are identifiable by qualification, eligibility or geography and from which the employer may reasonably be expected to draw employees (HRDC, Workplace Equity, June 2000, http://www.hrsdc.gc.ca/en/gateways
      /topics/wzp-gxr.shtml).

It is easier for members of a designated group to approach an employer for information when they know a company is proactively seeking to improve its employment equity. Practitioners can encourage clients to interview such employers to ask about company policies and how an employee might expect to be treated in that organization. When it comes time for actual job interviews, clients will know what to expect.

As barriers fall, economic advantages are realized, and as acceptance grows, the labour market will reflect a new labour force composition, more opportunities will be available to the four designated groups, and those providing career services will encourage people to consider a much wider scope of fields.

Award-Winning Equity Programs Special awards and certificates are presented every year to recognize outstanding employer programs that implement employment equity. Both the programs and the companies that implement them may be of interest to those working with members of the designated groups. The Vision Award and Certificate of Merit winners recognize that sound human resource planning and employment equity are rooted in a management philosophy that sees respect for employees and workplace improvements as the key to improved organizational performance. Reports on the winners can be found on the Workplace Equity Web site http://www.hrsdc.gc.ca/en/gateways/topics/wzp-gxr.shtml. Certificates of Merit are awarded to organizations for special and continued efforts toward attaining a representative work force. The Vision Award is presented in recognition of creative and innovative approaches to the implementation of equity and fairness in the workplace.

Overview of Other Federal Labour Laws

In addition to the Employment Equity Act, other federal laws that have a particular effect on the movement into, and out of, the labour market are the:

• Canada Labour Code;
• Employment Insurance Act; and
• Canadian Human Rights Act.

For example, the Canada Labour Code defines maternity leave and benefits. Allowing women to return to their job after childbirth makes it easier for women of childbearing age to be in the work force. It also brings about more temporary jobs to replace these workers on leave.

The Employment Insurance Act determines who receives insurance, when they receive it, how much they receive and for how long. The regulations affect movement into, and out of, the labour market, and also affect how employers think about part-time and temporary help. The rapid-fire changes to this legislation in 1994 and again in 1996 reflect the speed with which the economy and the labour market are changing. One factor taken into account by the most recent changes was the increasing number of part-time and multi-job workers. This led to the measurement of work by hours worked not weeks worked.

Collective bargaining also affects who can move into certain occupations and how long they can stay. There are complex interactions between the economic climate, technological change, union bargaining and employment opportunities. An example of such an interaction is described in the broadcast industry's human resource study.

Unions have some concerns about initiatives they see in the workplace. Employment equity legislation, for example, is considered a threat to union seniority rights and to the merit principle. Multi-skilling can be the thin edge of a wedge to reduce the number of jobs within the industry. It also has implications for jobs covered by more than one collective agreement (Canadian Broadcasting Industry, Human Resources Steering Committee, 1993, pp. 87-88).

Provincial/Territorial Labour Laws Standards are set relating to: who is covered under the Act; hours of work; minimum wage; vacation pay; overtime pay; equal pay for equal work; benefit plans; public holidays; pregnancy and parental leave; termination of employment, layoffs; severance pay; wage protection program; retail business establishments; home-based workers; domestic workers; agricultural workers; and lie detectors. Only the following industries come under the federal jurisdiction: aircraft operations; banks; radio and television broadcasting; grain elevators; uranium mining and processing; primary fishing; transportation, interprovincial communications and Crown corporations; and public service employees. All other employers and workers must comply with their province's standards and laws.

Provincial/Territorial Labour Laws

The labour laws governing most of the work force in Canada are generally provincial or territorial and they vary. Each province or territory may have a different minimum wage, different statutory holidays and different rules regarding holiday and vacation pay, hours of work and overtime, and so on. In some instances, an institution can fall under both jurisdictions, as in the case of Ontario community colleges which must conform to federal and provincial equity laws. Provinces are also at different stages in employment equity. Some have passed laws; some are still formulating legislation.

Information about the labour laws and standards in a province can be obtained from the provincial or territorial ministry of labour.

Implications for Career Decision Making

Counsellors and their clients can benefit from a knowledge of how demographic factors combine to influence the labour force. Data on the composition of the labour force can stimulate someone looking for work to think about questions that will aid in making a more informed career choice.

• Does it matter to me whether I work in a male- or female-dominated field?
• Does it matter to me whether I work in a field where there is a majority of younger or older workers?
• Is it important to me to work in a field that has demonstrated a commitment to hiring and integrating members of the designated groups (Aboriginal peoples, persons with disabilities, visible minorities and women)?
• What are the advantages of choosing any of the above; the disadvantages?
• If I have a college diploma and 70% of the people in the field have university degrees, will it affect my opportunities for increased skills acquisition and broader responsibilities?
• What salary is the average worker with my education and experience making?
• Will there be openings in this field in a few years due to retirements?
• Will knowing a language other than English or French be of value in this field?

Demographics Affect Career Opportunities Investigating demographic information might include gathering information from educational brochures, industry promotions and the newspaper. Skills Shortage Looms in Industry Canada's auto parts industry faces a critical skills shortage over the next 10 years. According to a 1998 Angus Reid survey, about half of auto parts manufacturers will need to hire 30% more skilled trades people and technologists. As many as 25,000 experienced employees will be reaching retirement age during the coming decade. Source: Brochure, "Engineering Excellence." Georgian College, (nd). Truckers and Construction Workers Facing Shortages The following information is from an Ottawa Citizen article in November 1999 on Canada's need for 50,000 new truckers. "The average Canadian trucker is now more than 50 years old." "Traditional skill pools for the industry have dried up. Many drivers used to come from farms and the military but fewer people are going into those jobs, leaving the industry with fewer prospects." "Canadian construction officials are also worried about their supply of skilled labour." "Economic forecasts suggest construction activity will rise steadily over the next five years and the industry will be in need of another 150,000 to 200,000 workers." "The problem is compounded by the fact that fewer young Canadians are choosing to work in the construction industry." "Like the truckers, construction officials have asked the federal government to recruit more skilled workers from overseas."

Looking up industry profiles or statistics on demographic information will provide information on the average age of the workers and the average age of retirement which can help a client understand where the job openings are coming from and at what rate the retirements will be creating work. If a client has training and experience in human resource management or as a personnel clerk, such information can help direct the client to choose an industry that may have many retirements looming on the horizon. For example, if the average worker age in the industry is 40 and the average age of retirement is 60, there will be more job openings from retirements sooner than in an industry where the average worker age is 34 and the average age of retirement is 65.

Practitioners and clients can also look up the age distribution of an occupational group in Job Futures. For example, retail and wholesale buyers have around 32% of workers aged 40 to 54 compared to heavy equipment operators who have over 40% aged 40 to 54.

By studying the demographic makeup of an industry, practitioners can help clients/students decide if it meets their needs and capabilities. Not all women can overcome the barriers of working as a minority in a male-dominated occupation. And not all older workers are comfortable entering a field where most of the workers are much younger than they are. On the other hand, there are many people who are ready for the challenge of taking training in non-traditional areas where opportunities exist. They probably will welcome information that helps them fit in where they can use their new skills.