Big jump in wage gap between immigrants, Canadian-born workers: StatsCan

Posted by admin on May 2nd, 2008

Piloting his cab through the congested streets of Toronto, Ifzal Ahmad is looking forward to the day when he can come up with $35,000 for a course that should allow him to again become a mechanical engineer. Despite 15 years in his profession in India, the 47-year-old married father of three — like so many other new arrivals to Canada — has found himself in a relatively low-skilled job because his qualifications aren’t recognized here. The latest data on income and earnings from the 2006 census released Thursday by Statistics Canada shows that highly skilled immigrants — the country’s preferred newcomer — have a long row to hoe once they arrive, and it shows in the amount of money they earn.

The past quarter century has seen the earnings gap between recent immigrant workers and Canadian-born ones widen dramatically.

In 1980, recent immigrant men earned 85 cents for every dollar of their Canadian-born counterparts. In 2005, that number plummeted to 63 cents. The drop was even more pronounced for immigrant women, who went from earning 85 cents by comparison in 1980 to only 56 cents in 2005.

Having a university degree didn’t help either.

Recent immigrant men holding a degree earned only 48 cents for each dollar their university educated, Canadian-born counterparts did. Some 30 per cent of male immigrants with a university degree worked in jobs that required no more than a high-school education — more than twice the rate of those born in Canada.

The gap was actually less for non-university educated immigrants, who earned 61 cents to every dollar earned by their Canadian-born counterparts.

“That’s not right because when you apply for immigration, they check all your degrees and send all your degrees to Canada for verification,” Ahmad said after dropping off his latest fare.

The lack of recognition of his qualifications or experience in a textiles factory managing 2,000 people, he said, came as a huge blow, as did the dilemma of trying to get Canadian experience when no one will give him work.

“Wherever you apply for a job, they say, ‘Do you have Canadian education? Do you have Canadian experience?”‘

The reason for the dramatic divide, Statistics Canada reported Thursday, was the decline in the information and communication technologies sector between 2000 and 2004. A disproportionately high share of those workers were trained in computer sciences and engineering, the agency said.

Foreign experience undervalued

Rene Morissette, lead analyst with Statistics Canada, said it is well documented that foreign experience has been increasingly undervalued.

The trend started in 1980, when immigrants began to see their earnings level fall even though their educational levels “grew remarkably” compared to those of Canadian-born workers.

“The group of people that were hit the most were the older recent immigrants,” Morissette said.

“This amount of experience in your [home] country is no longer rewarded the way it used to be, if it has any rewards at all.”

Analysts have put forward several explanations for the disparity. Employers may simply not appreciate or trust the quality of higher education in a country with which they are unfamiliar.

It can also be challenging for employers faced with the usual issue of orienting new employees to deal with the added problem of taking on someone with different language skills or cultural values. Others wonder if there aren’t simply too many newcomers for the labour market to absorb.

Some say discrimination to blame

Then, there is perhaps the most sensitive issue.

“There might also simply be discrimination,” said Morissette. “But this is awfully hard to test empirically.”

The new census data do show the earnings gap for recent arrivals aged between 25 and 34 who completed the final phase of their higher education in Canada also fare worse than their Canadian-born counterparts, suggesting something beyond credential recognition is an issue.

Ernie Lightman, an economist at the University Toronto, is convinced employer discrimination is the real reason many immigrants struggle.

Lightman did a study in 2006 of former welfare recipients in Toronto that found the foreign-born, despite having relatively superior education levels, fared worse than their Canadian-born cohort, even when moving onto a second post-welfare job.

The study also found immigrants were actually worse off financially after leaving welfare.

“Clearly, their education was not useful or usable in Canada,” Lightman said.

“The only explanation I can come up with is discrimination or racism or barriers in the workforce.”

Lightman does concede that other issues, such as language skills may explain at least some of the discrepancy, but notes the earnings gap widened at the same time as immigrants became increasingly non-white.

“I cannot prove racism or discrimination, but I have no problem believing that’s what’s going on here for lack of a better explanation,” Lightman said.

Politicians across the country have recognized the significant barriers skilled foreigners face in landing on their feet in the workplace once they arrive in Canada.

Ontario, for example, legislated an independent agency a year ago to ensure skilled newcomers have fair access to 34 self-regulating professions with penalties of up to $100,000 for mistreatment.

Across the country, some self-regulating bodies have made a concerted effort to streamline their recognition procedures. For others, the process remains slow and painful.

“This is a Goliath and we’re nibbling at its toes,” Timothy Welsh, of the Canadian Immigrant Settlement Sector Alliance, said from Vancouver.

“What we’re seeing is a lot more collective will [but] whether that’s making a difference for everybody right now is less clear because it’s such a complex issue.”

Differing standards

Part of the problem relates to Canada’s devolved federal system itself in which rules differ from province to province and, within that system, self-regulating bodies set their own rules for qualifications and standards of practice.

In all, there are about 400 licensing bodies in Canada — just for the various professions.

Last year, the federal government committed $30 million over five years to the new Foreign Credentials Referral Office, which is designed to help those trained abroad get their credentials assessed and recognized more quickly.

“Too many newcomers can’t get jobs they have been trained for,” Immigration Minister Diane Finley said at the time. “That’s a terrible waste, for them — and for the country.”

But Welsh, whose organization represents 450 immigrant and refugee service agencies across Canada, said while the office can provide information and general leadership, its scope remains limited as a federal body dealing with various provincial governments and provincially mandated agencies.

One area that needs to be looked at, he said, is whether Ottawa’s focus on recruiting skilled professionals abroad even makes sense given, for example, the need for trades and unskilled labour in provinces such as B.C.

In the interim, Ahmad plans to apply soon for a provincial loan that will help him pay for a course he hopes will lead him back to the kind of career he believes he should be pursuing. “If we get the opportunities, we can prove our worth,” Ahmad said.

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