Monday, June 19, 2006

Alberta's Free Market In Labour

Since 2004 the Alberta Tories, the Party of Calgary has been partying in Calgary while the province booms. Can you say lame duck government, all round, the cabinet, the back benchers. All waiting for the ultimate lame duck; King Ralph to finally step down.

Until he does, and then and only then after the so called coronation errr leadership race of the Tories. So maybe next January or February or heck make it March, they may start paying attention again.

In the case of planning for expectant and predictable labour shortages this government has spent thirty years with its head in the sand.


The downside of boom: Alberta's manpower shortage
Andrew Nikiforuk
From the May 22-June 4, 2006 issue of Canadian Business magazine

Alberta's labour crisis, the product of an energy boom and a demonstrable deficit of government leadership, has now reached a tipping point. While many Calgary firms actively talk about importing temporary workers from China and Mexico, Todd Hirsch, chief economist at the Calgary-based Canada West Foundation, calls the situation "almost absurd." Just two years ago, he thought Alberta's labour shortage was confined to skilled professionals. Today, almost every business sector in the Edmonton-Calgary corridor, along with key oil-and-gas towns, including Grand Prairie and Fort McMurray, can't even find people to peel carrots for $14 an hour. The squeeze has not only driven up wages by 6.8% (more than twice the national average); it is also burning out employees, curtailing business expansion, driving up prices and encouraging rampant worker poaching. "Do we really want 8% to 9% GDP growth at the expense of infrastructure and the environment?" asks Hirsch. "We have to get real and say faster growth isn't better.

The oilsands have become a vortex sucking up workers. With nearly 50 megaprojects on the books, worth an estimated $75 billion, the population of Fort McMurray, Canada's fastest-growing frontier city, could swell from 56,000 to 80,000 people in the next five years. Yet the municipality is already struggling with a growing infrastructure deficit of $1.2 billion, overcrowded hospitals and schools, and a housing shortfall of 1,200 units. It also has the highest monthly rents in the nation, averaging $1,478 a month for a two-bedroom apartment. A 2006 consultant's report on 21 key indicators of the region's sustainability gloomily describes the affordability and availability of housing as "worsening."

As a consequence, many oilsands developers have gone to extreme measures to acquire workers. To kick-start its multibillion-dollar Horizon mining project, Canadian Natural Resources Ltd. built its own private airstrip to fly in tradesmen. Given that the average price of a house in Fort McMurray has quadrupled from a modest $105,000 in 1995 to about $415,000 today, Canadian Natural Resources also briefly considered housing staff 1,127 kilometres away in Kimberley, B.C., and flying in workers for four-day shifts. And in a highly controversial move, the company, which might employ 3,000 construction workers for several years, is looking into importing temporary workers from the depleted oilfields of northeastern China. Some Calgary analysts have already suggested that the entire oilsands may be built by Chinese labour. (A spokesperson for CNRL said its executives couldn't "pull away the time to do an interview" for this story.)

The only free market in Alberta is labour. Rather than complaining about the use of temporary workers to bust unions and drive wages down, unions need to unionize the unorganized who now can bargain for higher wages. A generalized wobbly contract for each worker would show the bosses the real meaning of wage negotiations. As travelers and card carrying craft-trades unionists do as they travel across Canada.

A general contract could be created for each worker in Alberta, recongized by the labour movement as the living wage contract, thus assuring every worker in Alberta a share in the wealth they are creating. This would literaly push aside any form of minimum wage the State set. And that would be the ideal free market approach to bargaining with the bosses.

It is perfectly do-able by the labour movement in Alberta. Of course getting it done is another question. And as long as they are distracted by the threat of temporary workers they will not see the bigger opportunity that is before them.

Already young workers are wobblying the job in Calgary merely by the mere fact of a labour shortage their value has increased. But they value work less. Smart kids. They have struck the market at its heart. Not Bay St. but Main St.

Now who will take up the torch to organize this vast army of unorganized workers.

Prosperity's hidden toll

Two years ago, the labour crunch mainly involved skilled workers. Nurses, doctors, senior managers and welders were among the highly sought professionals who required some degree of training and education to warrant their demand.

Not anymore.

Today, the need for workers transcends all sectors, from the top to the bottom of the pay scale. It's causing no end of consternation for employers, as much for large companies as for small retailers and independents who can't afford to pay enough to keep sales clerks, dishwashers or cashiers on staff.

Help Wanted signs dot every corner of Calgary. Sure, it's a problem most cities would love to have, but one we can't afford to underestimate.

The Jobs Everywhere phenomenon is creating a curious scenario, especially in the McJob sector. The work ethic in this sector appears to be collapsing, particularly among 16- to 20-year-olds, says Todd Hirsch, a labour market-shortage expert for the Canada West Foundation.

"They don't think it's necessary to show up on time, or at all," says Hirsch. "They know they can walk across the mall and get another job, and maybe be paid more." Anecdotes abound as to how younger, part-time employees understand they're holding all the cards.

Recently, a local Kentucky Fried Chicken restaurant was closed indefinitely because it couldn't find enough staff to operate, posting a sign on its door saying: "Due to unavailable staff, we are unable to open doors at this time."

With four or five job offers available to young people, the feeling is: "I don't really need to work that hard," says Hirsch.

He points to the catering industry, which experiences a slow season from January to March, when most low-skilled workers are usually laid off. Instead, they are being paid $10 to $12 an hour to do pretty much nothing but be around for the start of the high season in May.

If it sounds desperate, that's because it is.

Also See:

Labour Shortage

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Anonymous said...

hello my name is kile zahorejko i am 20 year's old from lethbridge alberta canada i have worked in the northern alberta tar sands as a scaffolder for 2 years i believe that slowing down the economy is the only way to keep working wages as they are know. but the big oil companys are not gonna let that happen the vice president and also the ceo of haliburton will not let that happen the fact is the united states needs the oil for there economy or they will see economic collapse.the big boom is hitting everyone in alberta with higher rental of properties for the amount of maritimers moving in.i am a member of the united brotherhood of carpenters and have been since i was 17 i belive that temporary foreign workers is not the right solution as that will push my wage down dramatically like back in the 80's when my father told me that union's got hit the hardest which the entire construction industry has not recovered yet.with the amount of money being pumped into alberta i dont see why we cant all work at a decent wage for a longer stabler time. the oil boom has finacially benifited me but for how long. the fact is that real trade unions set the standard's of wages. the sweetheart organizations as i callthem mainly clac and merit shop dont have double time for weekends and there pension plans only offer rrsp's i like my pension i pay 5.00 an hour into my carpenters pension and 1.40 i to rrsp per hour with full benifits if foreigh workers are aloud in clac and merit shop will seize this oppurtunity to destroy our unions and not only will it affect us but it will affect you as well.we all need to work and it is our right to work at a decent standard of living as always my vote is union yes

Anonymous said...

I had my first headhunt in the curikudos job fair held in 2006. And now i think its time to switch over. Can some one let me know when the job fair starts again.