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
[email protected] Metcalf Foundation http://metcalffoundation.com/publications-resources/view/working-better-creating-a-high-performing-labour-market-in-ontario/