Several people changed their careers throughout the pandemic. While some industries experienced a wage increase, others dropped below average unable to match the increasing cost of living. As a result, several Canadians changed their occupation. Below is an explanation of where Canadian workers are going in this competitive labour market.
Using CBC New analysis of data collected by Statistics Canada, the report shows a shift in worker movement away from occupations in the service and food industries and into positions in IT, finance, and real estate, which may be more lucrative.
The severe lack of labour in various industries has worsened, as evidenced by the numerous help wanted signs that continue to pop up in restaurants and grocery stores.
Amanda Ryan, a Moncton, New Brunswick resident, had her own cleaning company up until she decided to switch careers to become a realtor last year.
Ryan, a mother of two, claimed, “I ran a cleaning business for a long time, and my body was starting to feel the effects of cleaning all the time.”
After one year as a realtor, Ryan said the work has been challenging but rewarding and has better pay.
Similar career changes took place during a tightening labour market, leading to a labour shortage in the sectors that workers left. Nevertheless, the overall unemployment rate in Canada is still 4.9%, which is the lowest level since 1970.
A closer look at the statistics reveals a longer-term shift in the country’s labour market sparked not just by the seismic changes of the previous two years but also by demographic changes over decades.
Summary of changes in Canada labour market
Data demonstrates dramatic movement in worker preference toward certain industries, like real estate and public administration, and away from others, like the food services industry.
According to Fabian Lange, a labour economist at McGill University in Montreal, many workers are climbing the “job ladder” toward areas with greater pay and benefits.
Lange further explained that at an individual level, people from hospitality and food services do not immediately go into finance, insurance, or real estate. Instead, they go into manufacturing or possibly into health consulting.
Then, they will go on to better-paying, higher-quality positions at the top of the pay scale. And those with higher-quality occupations tend to go further up the job ladder.
Changes in salary during the pandemic
In several industries, such as technology and information services, the hourly wage climbed significantly during this tight labour market.
While wages in the other industries lagged, industries such as manufacturing, food services, and retail have remained below average. Considering the rising cost of living, some of these sectors fell below the average offered wage during the pandemic.
He claimed that, at least in terms of supply and demand, the chronically low wages in some industries are unexpected. Further, he said the labour market’s current state indicates it is a seller’s market.
Several leaving jobs due to job dissatisfaction and retirement
The data further implies that more employees are quitting because they are dissatisfied with their positions and now have more options.
Almost twice as many employees quit their jobs due to dissatisfaction last month than in the previous year, July 2021. In comparison to other reasons such as retirement or going back to school.
An increase in immigration and encouraging younger individuals, such as students, with greater pay and part-time jobs could help alleviate the labour shortfall, according to Brittany Feor, an economist with the Labour Market Information Council.
Early retirement during the pandemic and its effects
In many aspects, according to Lange, the tight labour market is similar to what was anticipated before March 2020, albeit the pandemic may have caused some older workers to leave the labour force prematurely.
According to Lange, they stop working because they could be afraid to start working again at age 61. Then, after a year, the economy started to improve, but they decided to retire and start their retirement earlier simply.
The labour force participation rate in Canada is steadily dropping
The data shows that the country’s changing demographics are the main cause of lowering the labour market participation rate.
In a recent report, BMO studied the aging population’s impact on the workforce, emphasizing that this trend existed long before the epidemic.
It is important to stress that this continuous steady drop is almost a result of underlying demography, the report said, referring to the increase in the retiring population.
The report concludes that the demographic drain on labour supply will continue in the coming years.
Source: CBC News