If you are like me you may be struggling with why job vacancies are so high. We were experiencing some staff challenges prior to Covid but we seem to lost a segment of the population as we come out of the pandemic. Where did the people go?
The following is todays article in the Financial Post – Post Haste publication that provides an explanation. Data from Stats Can has for years pointed to the shift in demographics. Attention to trends is essential to prepare for shifts in the market.
| Good Morning! Since the pandemic, job vacancies in Canada have soared to record highs and jobless rates to historic lows, leaving employers struggling to find workers. Statistics Canada reported last week that job vacancies in this country surpassed 1 million in April, an almost 45% jump from a year ago. So where did all these people go? In an attempt to answer this question, CIBC economists Benjamin Tal and Andrew Grantham took a deep dive into the data. The pandemic threw many people temporarily out of work, mostly in low-paying jobs in the service industry. The labour market has now fully recovered but what is surprising is that share of low-paying jobs in overall employment has not. It’s not because Canadians are slacking off, the economists said. Labour market participation has been back to pre-pandemic levels for some time. Nor is it because Canadians are choosing to work for themselves. The share of self-employment in total employment is still 1.5% below pre-pandemic levels. The problem appears to be at its roots, demographic. Because of Canada’s aging population people with lower education levels are reaching retirement and not being replaced, a trend that was accelerated by the pandemic. Immigration has not helped to fill this gap as it once did. Increases in immigration over the past year have been largely driven by young professionals, many of them students, already in the country. Having studied in Canada, they are having greater success finding higher-paid jobs related to their education. “The pandemic appears to have caused, or accelerated, some structural changes within the Canadian labour market that are resulting in high vacancy levels — particularly for low-paying occupations,” wrote the economists. “Aging demographics, particularly among those with below university education, and immigration driven by new university graduates, have contributed to this trend. The result has been a greater proportion of people working in higher paying sectors, and labour shortages in many lower wage occupations.” Why that hasn’t yet translated into the boost of productivity you would expect is another mystery. The economists said part of the problem could be that sectors in which vacancy rates are high need the staff in lower paying jobs to reach maximum efficiency. A lack of baggage handlers, for example, would severely impede the operation of an airport. A lower level of experience by those in higher-paying jobs may also temporarily limit productivity, they said. The economists expect that Canada’s labour problems could ease somewhat in the future as immigration becomes more broad-based again, but only somewhat. “However the demographic and education structure of the population suggests that companies in lower paying sectors could continue having greater difficulties recruiting than in the past, resulting in higher wages to incentivize recruitment,” they said. |