News of the Canadian labour shortage has been heavily publicized in the media for months now. Evidence of the actual labour shortage is abundant; restaurants have been advocating that they are hiring, job posting sites such as Indeed and ZipRecruiter see new posts daily, and labour industries have consistently advertised their need for help. The shortage has become such a problem that Ontario has called on the federal government to double the number of immigrants allowed into the province to help boost the skilled workforce.
A dive into the statistics surrounding the shortage displays that there are currently 815, 000 job vacancies in the country; 291,000 of which come from Ontario (the highest province by a significant margin). While all Ontario industries are dealing with a labour crunch, health care, food services, manufacturing, and construction are by far the most hard hit. At first glance, it seems extraordinarily relevant to mention that these industries were all ones greatly affected by the pandemic; and it prompts the question of how COVID-19 impacted the shortage. This thought process is shared by many who see the shortage as a symptom of two problems: first, the COVID-19 pandemic; second, government benefits in response to the pandemic.
In full honesty, these claims reside partially in truth. Did the pandemic and government benefits adversely affect the labour shortage? Of course–and it would be irresponsible to negate their impact. However, stronger analysis into the shortage displays that their impact is nowhere near as great as some may say. The COVID-19 argument is the easiest to debunk because, if it was a root cause of the labour shortage, we would not have been experiencing a shortage before March 2020.
The government benefits argument also holds weight here: how have unemployment insurance benefits such as CERB impacted Canadians’ propensity to work? Analysis into how the United States Unemployment Benefit impacted their labour shortage finds that generous benefits had a small adverse impact on encouraging workers to seek new jobs. While this does display a potential causal link between unemployment benefits and the labour shortage, research into the labour shortage in Continental Europe and Britain largely disprove this effect. Nations in these regions are experiencing similar shortages to Canada, despite having little to no unemployment benefits of the pandemic.
So, while it could be said that COVID-19 and CERB payments contributed to the labour shortage; they are certainly not the root cause. Arguably, what has prompted this shortage is the change in how people value their time. Should workers value jobs in the labour industry when they do not feel valued by their employers? It is not that Canadians are unwilling to accept work; rather, they are unwilling to accept the conditions offered to them for the payouts received. Canadians are no longer eager to receive low salaries for dead-end service and hospitality jobs.
Instead, I see the shortage as evidence of a job quality problem. This argument is evident when one looks into ‘workplace ghosting’; the recent phenomenon plaguing Canadian companies. Workplace ghosting refers to when job candidates and new hires disappear without a call or an email to their employers. Notably, workplace ghosting is mostly present in low-paid, service-sector industries. On the contrary, companies that are hiring fully remote positions often have their top pick of candidates to choose from. Canadians are not unwilling to join the labour market, they are unwilling to accept the long hours, lack of benefits, and overall poor conditions offered to them.
These arguments are still best upheld in the recent amendments Ontario has made to the labour market. In a capitalist system, analysis of the market displays the cause and effect mechanisms at play in current economic situations. Currently, the labour shortage is the market mechanism that is forcing employers to redefine their value. Employers are forced to offer higher wages, better benefits, and use workers more productively to attract candidates. Throughout history, periods of labour scarcity have been opportunities for companies to introduce better working conditions.
This market mechanism is seen at work on the institutional level in one significant way in Ontario: the recently announced increase in the minimum wage. On November 2, Premier Doug Ford announced that the government will raise the province’s minimum wage to $15 an hour by January 2022. The most revolutionary part of the announcement was the increase in wage for liquor servers, who will now match the new provincial minimum wage. Currently, servers and bartenders make $12.55 an hour.
The Ontario raise in the minimum wage is a step in the right direction towards making the labour market more attractive. But I still maintain that more has to be done. Ford himself agrees, “Do I think $15 is wonderful? The answer is no. But do I think it’s a good start? The answer is yes.” As the industry that is currently in demand, labour workers have the upper hand. Demanding fair hours, wages, benefits, and suitable working environments to improve quality of life are reasonable demands — demands that the labour industry will be forced to consider if they want to end this shortage.
Claudia Velimirovic is in her fourth and final year at McGill University pursuing a major in honours International Development and a minor in Social Entrepreneurship. This is her third year writing for Catalyst and she is particularly interested in politics, gender inequality, and women’s health.
More of us are also educated and able to acheive more lucrative employment, and even then there’s minimum wage work that does not involve fast food, or other dangerous work. There’s easier, better paying and safer workplaces out there for the same or more pay. That’s a fact and we’re seeing it. The joy in this is that I don’t owe an explanation. If this upsets people, they may only stay mad.