The yawning gap between industries that can't find enough workers and those who have far more job-seekers than will ever be needed is holding Canada back and a major threat to the economy, one of Canada's largest banks warned Monday.
CIBC economist Benjamin Tal warned in a report Monday that Canada's job market is quickly coalescing into two tiers — those industries that have, and those that have not.
"We are increasingly seeing jobs go unfilled for long stretches due to a lack of skilled applicants," Tal said. "[But] for a number of occupations, employment opportunities are increasingly disappearing."
Traditional industries like bakers, butchers, tailors, manufacturing workers, office managers and teachers are showing signs of a "labour surplus" — where there are far more qualified workers than there are positions for them. The bank singled out 20 industries in this manner for having consistently high unemployment, and consistently low wage increases.
Statistics Canada data shows up to 16 per cent of Canadian workers fall into that category, where wage growth has been effectively nil this year.
On the other end of the spectrum, the bank lists 25 sectors of the economy that show signs of having a major labour shortage — industries that consistently can't find enough qualified people to fill needed positions.
"By far, the largest skill shortage was found in health-related occupations, the mining industry, advanced manufacturing and business services," Tal said.
Put together, those industries make up 21 per cent of all jobs in Canada. The average unemployment rate in those industries is about one per cent (well under the national average of 7.4 per cent) and workers in those fields on average see annual pay increases of 3.9 per cent.
"This labour market mismatch is big enough …to limit the growth potential of the labour market and the economy as a whole," Tal said.
There are currently 250,000 Canadians who have been unemployed for over six months. "Long-term unemployment reflects underlying labour market deficiencies and can be seen as the core of overall unemployment," Tal notes.
That's significantly higher than historical norms, and unlikely to change without major policy changes and serious incentives designed to filter people away from industries with job gluts and towards those that need workers.
"The practical implication of the growing job market mismatch in the Canadian economy is that this measure of long-term unemployment is more likely to start rising from its already elevated level," Tal said.
"It's not a cyclical story ... those people — in a good economy — cannot find a job because they don't have the skill set that the economy needs."