THE LABOUR MARKET CONTEXT: THE DEMAND SIDE OF THE EQUATION

THE LABOUR MARKET CONTEXT:THE DEMAND SIDE OF THE EQUATION

Presentation by Tom ZizysFrom 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 COMPANYFrom “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 byskill categories, Canada, 1996-2006

1996 2006

Comparison of distribution of jobs byskill 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

Non-Routine Cog-nitive

Routine Non-Routine Manual-15%

-10%

-5%

0%

5%

10%

15%

20%

8.6%

-5.6%

4.6%

10.6%

-6.6%

0.9%

9.2%

-11.0%

16.1%

1981-19911991-20012001-2011

BROAD TRENDS INEMPLOYMENT INCOMES

Average incomes, full-time/full-year workers, males and females, Toronto and rest of Ontario, 1995-2005 (2005 dollars)

1995 2000 20050

20000

40000

60000

80000

100000

120000

Males, Toronto

K-workersMiddle jobsEntry-level

1995 2000 20050

20000

40000

60000

80000

100000

120000

Males, rest of Ontario

K-workersMiddle jobsEntry-level

1995 2000 20050

20000

40000

60000

80000

100000

120000

Females, Toronto

K-workersMiddle jobsEntry-level

1995 2000 20050

20000

40000

60000

80000

100000

120000

Females, rest of Ontario

K-workersMiddle jobsEntry-level

WORKERS WITH POST-SECONDARY DEGREES

OECD, Education at a Glance, 2011

Percentage of population that has attained tertiary education,25-34 and 55-64 year olds, 2009

Canadian college graduate earnings(25-64 year olds) compared to other countries

(2010 or latest available year)

France

OECD average

United Kingdom

Sweden

Germany

Australia

United States

Canada

Japan

12.6%

13.3%

11.6%

5.0%

10.9%

8.1%

10.2%

13.3%

10.1%

9.9%

13.0%

13.3%

14.7%

14.8%

16.4%

19.3%

23.1%

34.7%

At or below half of the median 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)

United Kingdom

Japan

OECD average

Australia

France

Sweden

Germany

United States

Canada

28.0%

34.7%

26.7%

18.4%

25.1%

14.1%

27.2%

30.3%

29.4%

7.7%

8.9%

9.3%

9.7%

10.1%

10.9%

12.1%

12.8%

17.6%

At or below half of the median 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

Non-universi

ty post-se

condary ce

rtificat

e

University degre

e or certi

ficate, b

achelor's

or below

University degre

e, above bach

elor's0%

10%20%30%40%50%60%70%80%

54%60%

68%

28%20%

12%

Closely relatedSomewhat relatedNot-at-all related

Statistics Canada: Survey of Labour and Income Dynamics, 2006

Mean hourly wage by education leveland job education relatedness, Canada, 2006

Statistics Canada: Survey of Labour and Income Dynamics, 2006

Non-university posts

econdary

University, B

achelor's

or below

University, a

bove Bach

elor's$0$5

$10$15$20$25$30$35$40

$23

$31

$37

$22

$29$34

$18$22 $24

Closely related Somewhat related Not at all related

Mea

n Ho

urly

Wag

e ($

)

WHAT CAN BE DONE?

A strategy with three dimensions

Employer practices

• 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

Workforce development → increased productivity → better jobs → higher pay

Enabling environment

• 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

The information, the networks and the processes needed to make workforce development happen

Norms & values (1)

• 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)

A deliberate paradigm shift

Norms & values (2)

• 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

Privileging good workforce development practices

QUESTIONS?DISCUSSION

Tom [email protected]

Metcalf Foundationhttp://metcalffoundation.com/publications-resources/view/working-better-creating-a-high-performing-labour-market-in-ontario/