Canada's red-hot job market feels a little bit chilly
The numbers paint a rosy picture, but I bet you know some folks - especially young workers - who aren't reveling
Jan 8, 2018
A "Help wanted" sign is seen in the window of a bakery in Ottawa, Ontario, Canada, November 2, 2017. REUTERS/Chris Wattie
By Todd Humber
Raise your hands if you’re confused by Canada’s labour market.
I’ll tell you, right now, my hand is up. Way up. Like covered in drywall dust because it’s through the ceiling up.
Statistically, we can read that the job market is tight. The unemployment rate in December decreased for the third straight month to 5.7 per cent. That’s not just low, it’s historically low. Since comparable data became available in January 1976, the unemployment rate has never been smaller, according to Statistics Canada.
Employment increased by a red-hot 423,000 jobs (2.3 per cent) in 2017, far outpacing 2016’s 229,000 jobs (1.3 per cent).
So, from the jobseekers point of view, it’s the best labour market in at least four decades. Pop the champagne corks!
In the news, we see all kinds of optimism. The lead story for most of the day on Jan. 8 on hrreporter.com was headlined “Employers more optimistic, looking to invest and hire more: Bank of Canada.” It featured a quote that labour shortages are “more intense” than they were a year ago.
Anecdotally, though, I’m hearing a vastly different job story — and I bet you are too. I don’t see many workers, especially younger ones, sipping the champagne. If I show you a new grad, fresh out of school, you’ll probably show me someone struggling to find meaningful work or perhaps juggling multiple part-time jobs in a feeble attempt to make ends meet.
The stats solidly back that notion up — while employment increased for men and women aged 25 to 54 in December, there was little overall change for youth aged 15 to 24. The unemployment rate for that group in December was 10.3 per cent. That’s a significant improvement since 2016 when it was 12.6 per cent. But it is nearly double the national average.
So what gives? Why are boomers and Gen-Xers reveling in near full employment — with unemployment rates of 5.2 per cent for men and 4.8 per cent for women 25 and over — while the youngsters languish?
Ontario’s minimum wage boost to $14 an hour on Jan. 1, 2018, has made a lot of business owners cry foul. You can read the sour grapes from the likes of Tim Hortons elsewhere, but firms paying minimum wage have responded in some cases by cutting paid breaks, making staff pay for uniforms and even suggesting tips have to go straight into the till. (The tip move would be quite illegal, for the record, and Ontario’s less-than-amused labour minister is hiring 175 new inspectors to enforce labour standards in the province.)
That’s not the kind of behaviour employers can get away with in a truly tight labour market. Sure, we’re talking a handful of bad seeds who generated massive headlines, but if employment is so tight most of those workers would simply stroll over to a greener pasture. They’re not, so...
The answer to this conundrum seems, as it always does when it comes to people, complicated. The economy is doing well, no doubt. There are definitely talent shortages in some industries and some geographic areas.
For HR, the usual rules of a tight labour market undoubtedly apply — you’re going to have to do more to keep your most talented workers. That means pay for performance, perhaps beefing up the 2018 salary budgets a little higher than you initially forecast and reigning in rogue managers who are trampling over staff.
But the economic picture simply isn’t as rosy as the booming job numbers suggest.
Help me out here – tell me your story of the job market and what you think is happening, either with your own job hunting experiences or that of young workers you know.
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Todd Humber is the publisher and editor-in-chief of Canadian HR Reporter, the national journal of human resource management. Follow him on Twitter @ToddHumber