A recent RBC report suggests that labor shortages will continue to increase in the coming months.
In 2020, workers held off retiring and switching jobs due to dissatisfaction amid the period of overwhelming economic uncertainty. These workers may now start quitting their jobs, which would drive up the number of vacant positions.
Also, many workers in service sectors that were affected by the pandemic may have left their positions due to extended shut downs.
Economist Carrie Freestone, who authored the report, says a high job-vacancy rate can drag economic growth. Businesses may be forced to operate at reduced capacity. Employees are now in a stronger bargaining position to negotiate higher wages and better benefits. Also, the tight labor market may put upward pressure on wages, leading to higher consumer prices.
Provinces with the highest job vacancy levels may face challenges hiring for lower-paid positions. Although wages in accommodation and food services were up in June, average wages remained 57 per cent below other service-sector jobs. This may explain the increase in food services vacancies, and may continue to affect the sector if workers have left permanently.
