A growing number of Canadians are becoming unemployable in the new economy, but those who have work have a surprisingly large amount of job security, CIBC says in a new report.
Economists Benjamin Tal and Nick Exarhos noticed an “abnormal relationship” between job vacancies and unemployment: They have both been rising at the same time.
Ordinarily, when job vacancies increase, the unemployment rate goes down. But that hasn’t been the long-term trend in Canada since 2011, the economists write, with both rising at the same time.
This can be explained by “a disconnect between the types of workers desired and those that are available in the ranks of the unemployed.”
The report notes that the ranks of people unemployed for a short period of time (three months or less) are near record lows, but the ranks of the long-term unemployed “are at elevated levels.” That suggests there are two types of unemployed: In-demand workers who are rarely out of work and quickly find a new job, and others whose skills are no longer needed.
But the flipside of this, Tal and Exarhos say, is that those who have jobs are holding on to them longer.
“Today there is a near-record high 60 per cent chance of remaining employed after completing a first year on the job,” the report says.
“The share of Canadians with a job tenure of more than five years is at a record high, and the share of those with less than one year in tenure is at a record low.”
In other words, job security in Canada has rarely been better. And, the authors say, it’s because of fear: With so many unemployed people lacking the skills they need, employers are afraid to get rid of the talent they do have.
But for those stuck in the unemployment line, that means fewer job openings.
“Couple that with a skills mismatch and an aging population shrinking the workforce, and landing a job becomes harder today than it was previously,” the CIBC economists conclude.
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