He came to work Monday morning as usual, but instead of starting work, he made an announcement. ”œI quit,” he said, shocking his colleagues. Right there on the spot, the experienced welder hand- ed in his keys and walked out the door.
It wasn’t that the long-time staff member didn’t like his job, or had a fierce temper. The welder had been poached by a large construction compa- ny, given a salary offer so lucrative he’d have been an idiot to turn it down. The only condition his new employer gave him is that they needed him by noon that day. Hence the sudden resignation.
Poaching is increasingly common in Alberta’s white-hot economy. But what makes this story even more omi- nous is that the ”œvictim” of the poaching was the public sector. The welder had been a long-time instructor at one of the larger publicly funded trade schools in the province. The school, of course, was not even able to consider matching the offer. Now the welding program is sud- denly without an experienced instructor.
It’s a true story, and it highlights a dark side of the labour shortage currently plaguing Alberta’s economy. Some would argue that the use of the word ”œplaguing” in this context is a bit rich. After all, what province wouldn’t want to see 3.4 percent unemployment, rising wages (and tax base), and unprecedented inter-provincial immigration (and per capita federal transfers)? It seems like quite a nice problem to have.
But as this anecdote illustrates, not all employers are able to keep up with these crazy bidding wars and wage spirals.
It is not just the big, revenue-rich oil companies that are being forced to pay higher wages. Other, not-so-revenue-rich employers are being sucked into this wages battle as well: schools, publicly funded post-secondary colleges, the non-profit sector, the government sec- tor, and many segments of the private sector. The forestry sector in western Canada is a good example of that.
Back in the old days of ”œthe bust,” Albertans swapped ghost stories of massive layoffs, company foreclosures, and people walking away from their mortgages.
Today, they are still exchanging ghost stories, but the stories are of poaching and store closures and $16 per hour for people to peel carrots. They shake their heads in disbelief: the fast-food outlet in Lloydminster clos- ing its doors because it can’t find work- ers; the 17-year-old student dropping out of high school to take a $60,000 a year job driving a truck back-and-forth to a drilling site; the hotel flicking on the ”œNo Vacancy” sign " not because it is full, but because there are not enough workers to clean the rooms.
This is the new reality of ”œthe Alberta Advantage.”
When trade schools start losing desperately needed instructors, when kids start dropping out of high school or missing opportunities for post- secondary training to take eye-popping salaries, and when the work ethic among young people starts to noticeably decline because of the job and wage opportuni- ties available to them, one does start secretly wishing the provincial economy would slow down just a bit.
What public policy prescription can we offer our government leaders? Bring in more immigrants, pour more money into post-secondary education, enrich apprenticeship programs. It’s all been rec- ommended. And maybe not so surpris- ingly, the governments are doing it, both federal and provincial. This will make a difference, but as public policy measures usually do, it may take a little while.
In the meantime, Alberta suffers. It is a poor victim of its own runaway prosperity. Another hamburger joint closing its doors, another pimply faced kid making more money than his dad did three years ago. The ghost stories just keep coming.
I was delighted with the invitation to contribute regularly to Policy Options. I hope to bring some fresh, interesting, and even humorous perspectives on the politics and economics of the four Western provinces.
Frequently I am asked, ”œIsn’t the Canada West Foundation a right-wing organization?” I’m always annoyed by this question, mostly because it is a feeble attempt to pigeon hole us into a policy box. They want an easy label with which to either dismiss or endorse our research and ideas, with- out ever having to give any thought of their own.
I describe myself as neither left nor right, but as an economist who approaches policy research with the basic question, ”œWhat makes the most sense?” And I think it is fair to describe the research of the Canada West Foundation in the same way. The ”œleft- right” labels are simply inadequate in capturing the richness of the policy debate in Canada today.
A strong, united Canada benefits from the richness and diversity of its regions. And certainly a strong, pros- perous West has a huge contribution to make in that regard. It is a golden time in the West " not just economically, but also in terms of the wealth of poli- cy ideas and the willingness to explore new ways of doing things.