This column by Armine Yalnizyan was originally published by the Toronto Star on Monday September 5, 2022. Armine is a Contributing Columnist to Toronto Star Business featured bi-weekly.
This year marks the 150th anniversary of Labour Day, a statutory national holiday in dozens of countries that all started when a throng of 10,000 people in Toronto marched to demand the release of 24 jailed printers from the Globe newspaper. Their crime: going on strike to reduce their hours to a nine-hour day. The workers won, trade union rights became Canadian law and Labour Day, together with parades that still echo that first march, spread around the world.
Then, as now, a labour shortage was upon us. Then, the shortage was driven by the Industrial Revolution as rapidly expanding business and consumer spending created work more quickly than workers could be found. Today, tight labour markets are fuelled by population aging and the impacts of the pandemic, both reconfiguring what is made where in global supply chains, and by pent-up demand for consumers with extra disposable cash.
And then, as now, a widespread response to workers demanding and gaining better wages and shorter hours was the misleading notion, found in every era beset by tight job markets: “Nobody wants to work anymore.”
“Nobody wants to work anymore.” Really? No
The refrain that is making a comeback these days is just not true. In fact, every single statistical metric points to the opposite conclusion: unemployment rates are at half-century lows; job vacancies are at record highs, with roughly one unemployed person available per every job posting (and no, that doesn’t mean the unemployed person can do the jobs that are being posted); and more people are working longer hours at their paid work than before the pandemic, particularly women.
As well, the proportion of almost every age group between 15 and 64 is now greater than before the pandemic. We even have more people aged 65 and older working. In fact we’ve added almost half a million jobs on top of our pre-pandemic count. More people are working, not less. The problem is there’s more demand for labour than there is supply.
Why are labour shortages so bad now?
The single biggest factor behind today’s labour shortages is an aging population. Simply put, there are more exits than entrants to the labour force. Almost 600,000 Canadians aged into the over-65 bracket since the pandemic began. At the same time, we also have fewer potential workers coming into the workforce because the population in the 15-24 age bracket is shrinking.
But demographics aren’t the only drivers of the current shortage.
The last two years have seen a perfect storm of challenging conditions. A global pandemic meant more workers fell ill. That created more absenteeism. But it also overburdened a health-care system with its own labour challenges. The pandemic also slowed the usual inflow of newcomers who help us do the work that needs doing.
Then there’s households’ pent-up demand that resulted in a burst of spending on cottages and travel and going out to bars and restaurants, demand that couldn’t be met by expanding supply quickly enough.
How long will this last?
This isn’t temporary; we could be looking at 20 years or more of the “more people exiting than entering the labour market” dynamic. The last of the baby boomers turn 65 in 2029. More people may be working into their “golden years,” but an economy fuelled by 80-year-olds isn’t likely.
When Canada faced similarly tight labour markets in the past, the country turned to immigrants. Now we are again increasing intake of immigrants; but we are also bringing in twice as many people temporarily than permanently. A future filled with temporary foreign workers is not the most stable foundation on which to build Canada’s future.
The thing is, we are not preparing for the inevitable. We are just reacting. China, whose one-child policy from the 1980s portends serious labour shortages in the coming decades, is already starting to worry about not having enough workers.
If they’re worried, we should be sweating bullets.
But please keep in mind that demographic realities also offer us the opportunity to create a remarkable new world of work that provides better skill matches for employers, better work-life balance for workers, and better life chances for more people.
Labour shortages are not just problems. They can also drive solutions. Labour shortages could nudge us toward making every job a good job, which could enhance the fates of families, workers, businesses and our future. We could advance the human potential of every child and increase opportunities for those historically and systematically sidelined from good training and jobs.
Tighter labour markets mean more bargaining power for workers, for the first time in almost half a century. We could see wages and working conditions improve for more low-paid workers. Providing a living wage, so that nobody working full time remains in poverty, would boost the economy from the bottom up.
We know the best benefits are portable benefits, so we could make access to pharmacare, dental care, vision care, and mental health care universal, not tied to an employer or to the size of your bank account. We could guarantee all workers can count on 10 paid sick days a year and add paid leaves to help workers step away from their paid jobs over the course of their lives to do the unpaid care work for their loved ones or themselves after a serious illness, or update their skills.
After decades of nations competing internationally for capital to start and run businesses, expect decades of international competition for people to do the work that needs doing, across all skill and pay levels.
This push and pull will move more people from the Global South to the Global North, but where they choose to come depends on the quality of life and the quality of work that awaits them.
This is an extraordinary moment in history. If Canada is to succeed in this global competition, we need our jobs and our communities to be people magnets.
One hundred and fifty years ago, Canada led the way. Perhaps we can again.