Canada’s job market has finally recovered to something like its pre-pandemic state, and that’s good news.
But it is too early to pack the supports and benefits of COVID-19 and finish it.
The last Statistics Canada Labor Market Report shows an increase in months of employment for all types of people: full-time, part-time, young and old, men and women, black and white, in the public and private sectors.
But if the pandemic has taught us one thing, it is that we cannot count on smooth sailing.
Fall, and all that entails moving indoors with friends and family, even when the highly contagious Delta variant is still spreading, is upon us. New Brunswick and Alberta are imposing new limitations. Even when they dared to wait for the end to be in sight, our nation’s top public health officials warned us again Friday that this is not over.
And the job recovery is sure to be bumpy.
“It’s more difficult to open an economy than to close it,” Bank of Canada Governor Tiff Macklem said this week.
That is an understatement.
There are clear signs of strength in the labor market. Mothers and fathers have seen their employment levels return to normal, white-collar workers have seen steady improvements in employment opportunities, and the arts and culture sector finally rebounded after a really difficult year.
Racialized workers saw their unemployment rate drop by two percentage points in September.
The public and private sectors are creating full-time jobs.
But there are scars from the pandemic. In all, there are more than 500,000 people who are still looking for work, working less than their regular hours, or temporarily laid off.
Of particular concern is the number of people who have been unemployed for so long that their skills may stunt and their job prospects diminish. Statistics Canada says there are currently 389,000 long-term unemployed, double the number in February 2020.
But at the same time, stories of labor shortages abound. the Business development bank says 55 percent of Canadian employers are having trouble finding the workers they need and are making up the difference by working longer hours or delaying orders. Statistics Canada says job openings in the spring were 26 percent higher than two years ago. Canadian job postings on the Indeed website were up to 47% in September compared to February 2020.
The worker shortage is a puzzling conundrum that came up so often in the federal campaign that it’s now a bit of an urban legend: The federal government’s COVID-19 props are luring workers to stay home, causing labor shortages. everywhere.
Theoretically, it makes sense that generous benefits would deter low-wage workers from looking for work.
But the truth is murkier than that. And it’s important to get to the bottom of it because reelected Liberals are about to extend, and possibly modify, those same supports.
On the one hand, there is no indication that employers in general are so short of workers that they are willing to offer a higher wage to attract scarce labor. Wages have risen very smoothly over the course of the pandemic and there are no signs of a wage and price spiral that inflation watchers fear.
Additionally, Jennifer Robson, associate professor of political management at Carleton University, has been tracking the proportion of job seekers who are available for work, and she sees no sign of a deterrent effect.
“From what I can tell, among those who are jobless but willing and available to work, there are fewer currently sitting at home and not looking at what was the trend before the pandemic,” Robson said.
And in the United States, individual states that have abandoned their pandemic supports have seen their employment levels rise slightly more slowly than those states that kept the supports in place.
Back in Canada, Macklem doesn’t blame government profits for slowing the recovery. He says the mismatch between employers who can’t find people and people who can’t find work is partly because workers are nervous about public transportation, their workplaces are unsafe, or they are dealing with children in and out. from school.
On Indeed, senior economist Brendon Bernard adds a few more reasons to the list. The workers may have accumulated their savings and are not desperate for any previous jobs, he says. And all employers try to hire at the same time and create a bottleneck.
But he, like Macklem, does not completely rule out that there may be a deterrent effect to the benefits of the pandemic.
Some of those programs expire this month, causing some nervousness among employers. The federal government can extend them for an additional month without Parliament having to approve them, and Finance Minister Chrystia Freeland suggested this week that an extension will be made soon.
But as the government realizes the possibility of encouraging workers and companies beyond that date, they will need to make sure they fully untangle who enters and leaves the job market first so as not to make things worse.
Since health policy is similar to economic and fiscal policy these days, they can take some guidelines from the Hippocratic Oath: First, do no harm.
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