February 15, 2022

We need new solutions to solve the long-term unemployment crisis

Alberta’s labour market is struggling, but in two very different and distinct ends of the spectrum.

I talk to company managers every day who can’t find people to fill vacant positions. At the same time, there were about 50,000 people in Alberta last year who were unemployed for more than one year. That’s 50,000 households where every week for a whole year or more, someone wanted to work, but couldn’t find a job. Imagine a city the size of Grand Prairie without one single person employed and you’ll get a sense of the size of the problem.

This problem is also in many ways a silent crisis, as overall the Alberta employment market has essentially “recovered” from the pandemic, and we’re at levels of unemployment similar to where we were before it. This is great news. Today there are about 97,000 open jobs in Alberta that want workers. Thousands of jobs in tech are open. Employment in Alberta’s powerhouse energy industry is increasing and will continue as oil recently hit its highest price since 2014. Employment for women, a key area of pandemic concern, has returned, although structural inequalities remain. Employers across the province are warning of labour shortages. We’re even seeing a shortage of film and stage actors and experienced crew; and as someone who used to oversee Calgary’s film commission, I can tell you that doesn’t happen often.

If you have the right skills in the right place, the labour market is booming and you likely have little trouble finding a job. But if you are in a more challenging place, with a dated skill set, eroded confidence and reduced savings to invest in yourself, well, you may feel on the outside of this prosperity and even headed for long-term unemployment.

Long-term unemployment takes a mental toll on people, and as skills and experience grow out of date it gets harder to find the next job—what’s called labour market scarring. The hole can feel like it just keeps getting deeper.

What that also means is that even as the economy improves—and 2022 is going to be a banner year in Alberta—many of the long-term unemployed will remain that way. Automation and technology are already transforming the workplace. On top of that, the transition to a low-carbon future will only further disrupt Alberta’s labour market. This problem will not solve itself.

Thoughtful and decisive policy action is needed, and governments, businesses and post-secondaries all have a role to play. Here are three big ideas:

First, we need to reform employment insurance and job programs like Jobs Now and the Canada Alberta Job Grant to actually help people get jobs. I think that means paying people more on EI and for longer if they are taking a training program. It means revising programs to focus on the unemployed and offer wage subsidies. Helping someone transition into a new long-term career and off supports will create a many-fold return on that investment.

Second, we need to increase broad-based coverage for mental health and addiction support. Being out of a job for a long time impacts mental health, which, in turn, makes it harder to get a job. Breaking this vicious cycle takes steps like getting Alberta Blue Cross to cover a greater proportion of the cost of a counselling session, and to do so for more people.

Finally, businesses have a role to play too in studying and implementing best practices for employee transitions. Layoffs and changing skills needs are a reality of business. But forward-thinking companies have introduced programs to help their employees transition through layoffs to new roles, new careers and even starting new businesses.

The longer people remain unemployed, the more likely they are to face social and economic costs. Long-term unemployment is a dark hole to be in, let’s reach a hand in and help people out.

We should do this because it’s right. But it’s also good business.

As appeared in the Calgary Herald

Adam Legge is president of the Business Council of Alberta.

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