Labour mobility has fallen by half since the 1970s, creating stubborn pockets of unemployment. Statscan recently asked Canadians why they won’t move to find work—and the answer is a little depressing.
After an arduous seven-week ocean voyage from England, followed by six “very tedious” days travelling the short distance from Montreal to Prescott, Ontario, an exhausted George Hills, his wife, Ann, and their six children finally arrived in Ancaster, Ontario, in the summer of 1832. Like any good son, Hills promptly wrote home.
“Dear father and mother, we left you almost broken-hearted, but you may be satisfied that we have bettered our condition by coming here,” he wrote. “I got work the first day I was here and have had plenty of work ever since… I know that a poor man can do a great deal better here than he can at home.” Despite his optimism, however, Hills reminded mom and dad that his new life included “a good many hardships.” Besides the gruelling journey, he noted “we work here from sunrise to sunset.”
The Hills were among the first of 1,800 “Petworth emigrants”—poor labourer families from Sussex, in southern England, sent to Canada by the Earl of Egremont to relieve poverty on his lands. Hills’s letter recounts a quintessentially Canadian journey of hardship and hard work in the search for a better life.
Today, economic opportunities still vary widely by geography. Despite a national unemployment rate that recently hit a 40-year low, provincial rates range from 14.7% in Newfoundland to 4.6% in British Columbia. In other words, anyone who finds themselves out of work in one province could probably find better prospects simply by moving. Despite our claim to be a nation of hard-working immigrants, however, these days Canadians seem increasingly incapable of putting that concept into practice. Most Canadians would rather stay put, regardless of where the jobs are.
According to Statistics Canada, the annual rate of interprovincial migration has fallen by more than half since the early 1970s. Internal migration once exceeded international immigration to Canada by a huge margin; today, more people arrive from outside our borders each year than move between provinces. If unemployed Canadians were prepared to pull up stakes to find work, economic logic dictates employment, earnings and growth rates would eventually equalize across the entire country. Yet such gaps are a permanent fixture of the Canadian experience.
There are plenty of theories for Canada’s severe case of stay-at-home-itis. Generous transfer payments—particularly those sweetened employment insurance (EI) benefits the federal Liberals provided for Atlantic Canadians in the last election—are often blamed for keeping unemployed workers at home. Provincial reluctance to recognize occupational credentials from other jurisdictions is another common complaint. And while American rates of interstate mobility are substantially higher than in Canada, the same relentless downward trend is also in play south of the border. According to the U.S. Census Bureau, the internal migration rate has fallen to its lowest level since tracking began in 1948. Many American observers theorize this is due to skyrocketing housing prices, a suggestion that seems equally applicable to Canada.
The problem with all these perfectly plausible explanations, however, is that they’re just guesses about why workers are increasingly reluctant to move. To solve this riddle once and for all, Statscan finally decided to go straight to the source. “If you were offered a job in another province, would there be anything standing in your way of accepting that job offer?” the 2016 census inquired of unemployed Canadians. It’s the first time such a question has been asked. The replies are surprising, and utterly depressing.
Less than 1% said a lack of credential recognition would prevent them from taking a job in another province. The high price of housing in other regions was similarly a non-issue; only 1.2% cited this as a barrier. And the financial implications of leaving your home province to take work elsewhere—presumably including the loss of attractive EI benefits—was cited by just 9%. The overwhelmingly dominant reason has nothing to do with social policy but, rather, social circles.
Half of all respondents said personal reasons explained their refusal to move to a new province for work. Of this group, nearly two-thirds explicitly said they wouldn’t want to leave their family and friends behind. Another quarter said their spouse or children would balk at a move. A much smaller fraction claimed the need to care for relatives. And while you might reasonably expect married folks to be less willing to leave familiar surroundings, a substantial 38% of unmarried and presumably footloose adults also claimed personal reasons for their reluctance to seek their fortune elsewhere.
Why do Canadian unemployment rates vary so much between provinces? Because most unemployed Canadians would rather stay home than depart for brighter prospects. Familiar faces are apparently more important than opportunity and accomplishment.
Beyond the damage this does to the once-bold Canadian spirit of adventure, there is a real economic cost to all this domestic lethargy. Persistently high unemployment rates in some parts of Canada—at a time when the rest of the country is enjoying a historic boom in employment—reveals a serious impediment to the national labour market. Greater balance between jobs and workers from coast to coast would boost efficiency, keep a lid on inflation, lower the cost of social programs and provide more rewarding outcomes for out-of-work Canadians. Despite all these benefits, however, change seems unlikely. Given the personal nature of the reasons for our predicament, no amount of government intervention is going to fix this situation. We’ve become a nation of homebodies.
Source: The Globe and Mail