Thursday, October 7, 2010

Economics: The Immigrant Gap

TORONTO, ONTARIO - In theory, having a college degree should go a long way toward avoiding unemployment. According to statistics released this week, people with at least an undergraduate degree in Canada have a 3.4% unemployment rate, compared with 8% overall. However, if the unemployment rate of 8% feels too low, that's probably because you have migrated to Canada. Migrants with at least an undergraduate degree have a 13.4% unemployment rate, 4.1 times the rate for born Canadians.

Three factors seem to have been identified as leading to the large discrepancy. Language skills, problems with recognition of foreign credentials, and lack of Canadian work experience are cited. Only the last factor could possibly be at work in my case, and I suspect in this economy that it is by far the largest factor. Near as I can tell, this is a completely experience-driven market--employers will only consider candidates that were doing exactly the same job for several years at another company. Want to sell oneself on the basis of flexibility or education? Good luck. When there's no reward for taking risks in the labour market, the safest thing for an employer to do is hire someone that's already done the job.

The "immigrant gap" in the unemployment rate made the news because Canada is expected to grow only on the basis of immigration by 2030, and the figures on the surface seem to suggest that the country does not know how to integrate the educated immigrants that it will need in the future. As Amanda Lang of the CBC put it, if the current underemployed or unemployed immigrants were working at their potential, there would be $6 billion more flowing through the Canadian economy.

Yet, this may not actually be an immigrant problem; the immigrants like me may be closer to canaries in a coal mine. Because immigrants as a class almost by definition have the least Canadian work experience, they will be hurt the most in an experience-based economy. I've told the story on this blog before about a hiring manager that was so intent on finding the perfectly-matching candidate that a senior position was left open for nine months--until a corporate re-organization eliminated the whole group as under-performing. That was a Canadian hiring manager.

With unemployment high, stories like that are extremely rare right now--so many people are out of work that employers have many "perfect" résumés. When the economy starts to expand at historical averages or better in the future, successful employers will have to get over the perfect-experience mentality, take some risks in order to get rewards.

In the meantime, those of us with experience in fields that may never hire again have a pretty bleak outlook--even going back for more education doesn't help, as unless that results in a blockbuster internship, the fundamental problem hasn't changed--a lack of experience. That's true whether we are immigrants or not.

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