When the pandemic began, Canada was hit with a wave of job losses. The labour market recovered these jobs by the end of 2021. Very quickly, however, economists who had been concerned about pandemic-related unemployment started to raise concerns about the opposite problem – labour shortages.
In the two years prior to the pandemic, there were between 500,000 and 600,000 job vacancies across Canada. This number skyrocketed to 900,000 vacancies by the final half of 2021.
As worker advocates, it is important for us to understand what is behind the huge increase in unfilled positions. While employers and governments often claim that job vacancy numbers reflect a lack of qualified workers, this is not always the case.
For example, if we see job vacancies rising in a sector where compensation remains steady, it may be that the number of unfilled positions reflects a lack of people willing to work for the wages offered. Instead of raising wages to appropriate levels, however, many employers are recruiting migrant workers to fill the gaps.
We can see this specific scenario playing out right now in the Canadian health care sector.
The health care sector was already recording higher than average rates of unfilled positions before the pandemic. Between the start of the pandemic and the end of 2021, the number of unfilled positions nearly doubled, from 64,000 to 126,000.
These vacancies are linked to low wages. Despite the large number of openings and the desperate need for workers, wages in the health care sector have not even kept up with inflation. This slow wage growth is directly related to political interference in collective bargaining, as provincial governments across Canada have legislated annual caps to public sector wage increases as low as 1%.
In other instances, job vacancies stem from a lack of available hours. A good example of this can be seen in Canada’s accommodation and food services sector.
The accommodation and food services sector has the highest number of unfilled positions in Canada. It is also the only sector over the past year in which hourly wages have increased faster than the rate of inflation.
Given the unusually high number of open positions in the sector, economists would expect current staff to be working more hours to cover the shortages. However, the average number of hours worked in the sector were lower in 2021 (26.4 hours per week) than they were in 2019 (28.3 hours per week). The data thus suggests that although wages in the sector have increased, employers still aren’t offering enough hours per week for workers to make ends meet.
In these first two scenarios, what appears to be a labour shortage is instead a shortage of sufficient wages and hours. A true labour shortage, on the other hand, may be indicated when we see job vacancies increase despite concurrent increases in wages and hours. This is likely the case for Canada’s information, culture, and recreation sector, which is seeing a high job vacancy rate despite a nearly 7% increase in wages offered for vacant positions and an increase in weekly hours (from 31.6 per week in 2019 to 34 hours per week in 2021).
Even though the data suggests that many job vacancies in Canada are tied to insufficient wages and hours rather than a lack of workers, employers are claiming that they need more “flexibility” to fill positions. Rather than ensuring fair working conditions, employers are pressuring governments to weaken labour legislation and unemployment protections. Employers are also advocating for an increase in temporary and precarious workers, including those who, under the Temporary Foreign Workers Program, are tied to a single employer.
Such an approach exploits migrant and immigrant workers and keeps all of us in a race to the bottom. The growth of low-paid, precarious work is the result of decades of Liberal and Conservative governments which have eroded worker rights. Our current job vacancy rates are rooted in these long-term attacks. We cannot fix our job vacancy problem by leaving immigrant and migrant workers at the bottom of the labour market. We must continue our fight for decent work for all.