Effect of Immigrant underemployment on Canada’s productivity

immigrant Under employment is detrimental for nation's productivity

The issue of immigrants’ underemployment is becoming a chronic problem to the nation. It seems to be reducing the productivity of the country. The fact of immigrants’ contribution in development cannot be denied as they open new businesses work in different areas which makes the nation even more prosperous. They may also be termed as an engine of innovation.

Immigrants are underemployed and are paid lesser than a native. In spite of the fact that 75% of the newcomer immigrants have a post-secondary education they are earning only $60 dollars which is way behind the amount of $80 dollars which they earned in 1970. Here the depriciation of money is also to be taken into account while calculating the difference. Most of the immigrants are overqualified for the jobs they are involved into. They are paid lesser than their native counterparts.

The issue of underemployment has increased the gap of U.S.-Canada productivity by 20% in the last few years.

According to an estimate about 20% of the male immigrants leave the country within year of coming here which has another negative impact on the economy. These males are all working, hence the ratio of aging and young population in Canada is disturbed too. In absence of young immigrants the nation’s population will be lopsided with more of aging people who can hardly make any contribution to the development and productivity.

In the recent past, “short term immigration programs” have been designed and promoted which probably has given temporary solutions but in the long run have very little to contribute. Such programs have invited unskilled labors, employed them for a given a job at a much lower cost and has made the employer happier. In the long run the growth of market potential has been ceased as the low skilled labors cannot adjust to the changing labor market conditions.

Deputy Chief Economist of CIBC, Mr. Tal says, “This is not an efficient market.”
He also says, “Without a significant increase in immigration based productivity, the aging profile of the population will work to reduce the standard of living of all Canadians.”

The Federal Skilled programs are also not untouched by the short term approach. Out of 29 preferred occupations about 75% of them are related to Construction Industry. When this industry experiences a complacent stage, the labors will be left with no work or very little work.