Underemployed Immigrants in Canada Adversely Affecting Economy – Report

A report issued by the Canadian Imperial Bank of Commerce (CIBC) World Markets claims underemployment of immigrants in Canada for being one of the key factors adversely affecting the country’s economy. The report stated the conditions responsible for underemployment of immigrants living in Canada and also suggested possible solutions and remedies to overcome the conditions.

The report is written by Benjamin Tal who is the deputy chief economist of CIBC World Markets. According to Mr. Tal, the economy is most vulnerable to underutilization of the resources available in a country, and regards the underemployment of immigrants as a major underutilization of an available resource.

The report said that new comers to the Canadian cities are, although highly or at least enough educated, still facing the problems of not being able to procure jobs suiting their expertise. This, according to the report, results in these immigrants being underpaid as compared to their local Canadian counterparts. Statistics included in the report showed that majority of the immigrants earn 20 percent less than that of Canadian citizens. And the earning gap has been continuously increasing throughout the years, and is still ascending.

The reason, according to Tal, of the consistent increase in the gap is the mismatch between the expertise of the new coming immigrants and the skills that the Canadian labor market requires. It means that the immigrants have skills that are or might be already in abundance in the Canadian labor market, creating a shortage of jobs compatible to their skills.

“This,” according to Tal, “is not an efficient market.”

Furthermore, the communication barrier is also one of the major reasons that the immigrants are unable to get jobs that they are best designed to do. Most of the newcomers, according to Tal, are not proficient enough in the official languages of Canada, which are English and French. Due to this, they always have to go for the next best thing.

The report also compared the Canadian situation with that of Australia, commenting positively on the latter. Tal said that the Australian immigration authorities have better tackled the issue than their Canadian counterparts. He said that the Australian government created pre-entry linguistic training programs for potential immigrants which have proven to be very positive for its society, as immigrants arriving to the country are already well trained in the official language. Due to this, Tal stated, there is a 50 percent smaller gap between the earnings of Australian citizens and the country’s immigrants.

While suggesting possible solutions for this problem, Tal wrote in the report that the current Canadian immigration policies were mostly based on short term analysis. He said that long term policy making is the key to prosperity in any country for its economy. He said that the Canadian immigration department must reform its policies to encourage import of productive immigrant labor into the country, matching the market conditions prevailing in the labor market of Canada.

“We should be taking a long term view.” Tal said, “Without a significant increase in immigration based productivity, the aging profile of the Canadian population will work to reduce the standard of living all Canadians.”

Tags: Australian immigration, Canadian Immigration, CIBC World Markets report, immigrant workers, immigrants in Canada, import of Productive Immigrant labor in Canada