No one to work, but wages are rising: Canada's supply and demand crisis
What the future might hold for the Canadian economy amid a dramatic labour shortage.
As the threat from the coronavirus diminishes amid the rapid vaccination process, business activity among Canadians is also increasing. However, employers are finding it increasingly difficult to fill empty positions. In the U.S. and the U.K., many companies are facing the worst labor shortages on record in decades.
Labour shortages
"There's a shortage of workers. We see it," commented Julie Labrie, president of bilingual staffing company BlueSky Personnel Solutions.
The country's job market was strained before the pandemic, she said. But now Julie is hearing from companies that have not been able to fill their vacancies for three or four months:
"Competition to recruit new staff is fierce, with qualified candidates regularly receiving multiple offers and only agreeing to work on the most favorable terms," Labrie added.
Anecdotal evidence suggests that employers are willing to pay more when they find the right employees. As Labrie pointed out, the labor shortage has already led to a surge in wages. Some employers are willing to raise salaries by as much as $10,000 CAD for new hires.
The mismatch between supply and demand in the labor market was already evident in the spring, as noted by Mikal Scuterud, an economics professor at the University of Waterloo:
"There are far more vacancies in our labour market than there are workers willing to fill them. To sweeten the deal, employers are also increasing billable hours — many now offer four weeks of vacation time and readily agree to employee requests to work remotely for at least part of the time. And if the virus continues to recede, the country's labor shortage is bound to become even more acute."
As more and more people begin to realize that the economic recovery will take longer, Julie Labrie expects that Canada will soon be slammed with waves of self-employment layoffs. People are now dropping out of the jobs they held onto during the pandemic and looking for new ways to make money. And the current labor shortage is just the beginning.
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