The Alberta Federation of Labour's Massive "Progressive Economics" Fail

One of the downsides with having one of the hottest -- if not the hottest -- economies in the world is that there comes a time when you might not have enough labour to meet the demand.

Alberta experienced that just a few short years ago. And if you accept the Alberta government's most recent projections, Alberta may be in for the most pronounced labour shortage of its history -- a shortage of as many as 114,000 workers by 2021.

Unless, of course, you ask the Alberta Federation of Labour. They, apparently, have a very short memory, and insist that everything is going to be a-OK.

Apparently, their complaint is that the Alberta government used a formula to compute these numbers that they don't like.

At the core of their complaint is that the government used a formula that subtracted annual change in labour demand from the annual change in labour supply. Apparently, the AFL prefers a method that simply subtracts labour demand from labour supply.

"These projections are built on a lie, they're designed to manufacture a crisis where there is none. So, what do we do about it?" demanded AFL President Gil McGowan. ""I've written a letter to (Employment and Immigration Minister Dave Hancock), asking him to justify his decision, and the government's decision, to use such a discredited approach (to formulating labour projections)."

But whose approach to projecting labour availability is actually discredited? It turns out it's the AFL's.

The weakness in the AFL's favoured approach is obvious: it treats both labour demand and labour supply as static. It fails to take into account growth of labour demand on a year-by-year basis, and overlooks the number of workers that can be brought in on the same basis.

The AFL describes the government's method of calculating labour supply as "discredited," but the truth is that based on the labour shortages Alberta experienced very recently -- labour shortages the province turned out to be largely unprepared for -- and by the looming labour shortage the province is already on the very verge of. Placement agencies have already turned to recruiting US Army veterans to fill jobs in Alberta.

This is something that many left-wing Canadians took to their Twitter accounts to protest, but the AFL has a very unique interest in this matter. After all, should a minimum of 114,000 new workers stream into Alberta over the next nine years, there's no guarantee that they'll agree to join union shops. In a seller's labour market, absolutely no one will be able to coerce them to. They could just as easily decide to ply their trades with a MERIT contractor, and would probably be much better off for it That might result in an awful lot of new competition that the flagging AFL just might not be able to stand up to.

That the only "academic forum" the AFL can find willing to air their grievances is the Progressive Economics Forum is also very telling.

It seems worth noting that the Progressive Economics Forum has also given Robyn Allen an outlet for her own junk economics. As reluctant as I am to simply attack the source, it seems that anything originating from the PEF needs to be taken with multiple grains of salt. Judging from history alone, their projections that Alberta's labour market will remain hunky dory is definitely one of those things., Sat Aug 4 2012
Dave Hancock, Patrick Ross

Be the first to comment

Please check your e-mail for a link to activate your account.