Is there a skills gap in Alberta's labour market? Two economists weigh in

Budget documents released earlier this year posit that Alberta is facing a skills gap: unemployment remains a pressing concern, but employers are reporting challenges filling vacancies.

Unemployment rate was 6.5% in March

A staff member works the grill at a restaurant in High Level, Alta. Many of the job vacancies in Alberta are for service roles. (Paige Parsons/CBC)

Alberta's labour market is in a state of flux, but not everyone agrees about what's actually happening on the ground. 

Budget documents released earlier this year posit that Alberta is facing a skills gap: unemployment remains a pressing concern, but employers are reporting challenges filling vacancies. 

The 2022-25 Fiscal Plan points a finger at the pandemic for having caused shifts in the labour market, including increased automation and digitization, changes to workplace structures and older Albertans opting to leave the workforce at an increased rate. 

"These developments have resulted in an uneven labour market recovery. Employment in some sectors continues to lag, while other sectors face pronounced skill shortages," the plan states, citing a survey by the Alberta Chambers of Commerce that reported nearly half of respondents were dealing with staff shortages, and an RBC study that predicts demand for workers is going to climb as the province continues to recover from the pandemic and sees demand in the oil and gas and construction sectors.

And even though jobs have recovered to pre-pandemic levels, there are several key demographics where the province worries employment levels are lower than they ought to be.

On Tuesday, Premier Jason Kenney outlined the details of a $600 million jobs plan, funding various education and retraining initiatives to help address labour market issues.

CBC asked two economists to weigh in on what's happening in Alberta's labour market. 

Help wanted?

University of Calgary economist Trevor Tombe said there are some challenges facing the province's labour market, notably that older workers aren't jumping back in. But he questions the narrative that there aren't people qualified for available positions.

"Employers are absolutely looking for workers. But the evidence that it's really a skills mismatch is, I think, unclear," he said.

Tombe said there are many more job vacancies than there were pre-pandemic and that the postings are remaining unfilled for longer. But many of the wanted ads are for service industry jobs, and only 32 per cent of vacancies require more than a high school diploma. 

Tombe said he can only speculate as to why people haven't returned to those types of jobs, but said the market will adjust, either through wages increasing to attract applicants or through employers learning how to be more efficient and get by with fewer staff. 

Despite that, Tombe said the province's plan to invest in job training and education is a good one, and he hopes the plan detailed by Kenney Tuesday is just the beginning of investment in education opportunities.

Tombe said it's important to remember that while employment has recovered to pre-pandemic levels, Alberta is still about 60,000 jobs short of recovering from the major recession it was still working its way out of in March 2020.

Some Alberta energy companies have recently reported they've been having a hard time finding workers as the industry rebounds.

But Tombe said that while energy production jobs are stable, the oil and gas support jobs that were lost during the 2014 recession and during the pandemic likely won't recover to boom levels, and those workers need to be retrained.

"It's about all sorts of initiatives because there's tens of thousands of individuals, each in unique circumstances, that need to shift into different types of activities than they were in previously," he said.

The old Alberta story

When it comes to job vacancies, University of Alberta economist Joseph Marchand said he's not convinced the province will face a widespread labour shortage.

Marchand has studied past Alberta labour market shortages, using the province's definition of a shortage being when unemployment drops below 4.5 per cent. It happened in the mid-to-late 1970s, the mid-to-late 2000s and briefly in the early-to-mid 2010s.

With unemployment sitting at around 6.5 per cent, Alberta isn't in danger of reaching that much of a squeeze in general, Marchand said.

However, he said that looking at industry specific unemployment levels paints a picture of what type of worker will be most in demand — and notes that there's only a one per cent unemployment rate in oil and gas.

"If I was worried about labour shortages, I think I would worry about that one the most in this province," Marchand said. 

An oil pumpjack operates beneath the aurora borealis just north of Calgary. Alberta's unemployment rate in oil and gas is just one per cent. (Robson Fletcher/CBC)

Education, manufacturing, health care and science and technology sectors also have particularly low unemployment rates.

Marchand, who studies local labour market effects of boom and bust cycles, thinks ongoing uncertainty around the pandemic among both employers and workers is holding back some of that progress.

Given the current high energy prices, Marchand is more optimistic than Tombe about the demand for more oil and gas jobs.

"We should gear up to the day that the COVID cloud dissipates and we're left with the same old Alberta story to deal with," he said. "So I think the focus should shift to that now because there's not much we could do about COVID uncertainty and people waiting on the sidelines."


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