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HomeWorld NewsCanada newsIn a tight labour market, this is where Canadian workers are going

In a tight labour market, this is where Canadian workers are going

in a tight labour market this is where canadian workers are going

A cellist who trained to become a coder. A teacher who transitioned to sales. A hotel worker who moved to the public service. Stories of people changing career paths during the pandemic have been well documented.

So, too, has the dire shortage of workers in some sectors, with help wanted signs posted in the windows of countless restaurants and grocery stores.

Statistics Canada data analyzed by CBC News bears this out, showing a migration among workers between sectors — from jobs in the service and food industries, to potentially more lucrative positions in fields such as tech, finance and real estate.

Amanda Ryan, who lives in Moncton, N.B., had her own cleaning business until last year, when she made the decision to become a realtor.

“I had a cleaning business for a long time and my body was starting to feel the effects of cleaning all the time,” said Ryan, a mother of two.

“I was trying to create something I’d be able to do when I couldn’t clean anymore and I figured, with knowing about houses and being able to build my own business, that doing real estate would probably be successful.”

One year in, Ryan said the job has been challenging — but rewarding, too. And better paying.

Such career changes have taken place in the midst of a tightening labour market, resulting in staff shortages in the sectors workers have left behind. Overall, Canada’s jobless rate remains at 4.9 per cent — the lowest level since 1970.

An examination of the data also reveals a longer term shift in the country’s labour market, spurred not just by the transformative past two years, but by demographic shifts that have been underway for decades.

Here are five charts that help illustrate Canada’s shifting labour landscape:

The above chart shows the dramatic shift among workers toward certain sectors, such as public administration and real estate, and away from others, such as food services.

Fabian Lange, a labour economist at McGill University in Montreal who reviewed CBC’s charts, said it appears many workers are climbing the “job ladder” toward industries with better compensation and benefits — a phenomenon he is in the midst of documenting in the United States.

“We see that at the individual level. We see people from accommodation and food services, where they don’t go straight to finance, insurance, real estate, but they will go toward maybe manufacturing or … maybe health consultancies,” he said.

“They will transition to jobs that are higher up the wage ladder, that are better quality jobs. And those in the higher quality jobs tend to transition themselves further up that so-called job ladder.”

Amid this tight labour market, the offered hourly wages increased substantially in certain sectors — such as technical and information services, as seen in the chart above.

Meanwhile, the wages in other areas, such as manufacturing, food services and retail, have continued to lag.

In fact, when taking into account the rising cost of living, some of these sectors saw the average offered wage decline during the pandemic, Lange said.

The persistently low wages in some sectors is surprising, he said, at least from the standpoint of supply and demand.

“The labour market is tight right now, and what that suggests is that this is a seller’s market,” said Lange.

“Workers should be in a strong position in this labour market, and we should see that in compensation. And we haven’t seen all that much [increase] in compensation.”

The data also suggests, as seen in the above chart, that an increasing number of workers are leaving their jobs because they aren’t satisfied — and now have other options in the job market.

Nearly double the number of workers left their jobs for that reason last month than in July 2021, far surpassing other stated reasons, such as going to school or retiring.

Brittany Feor, an economist with the Labour Market Information Council, said encouraging younger people, such as students, with higher pay and part-time positions could help address the labour shortage, as would an increase in immigration.

“Enticing some of those people out of retirement to come back to the workforce is another solution,” she said.

In many ways, Lange said, the tight job market resembles what had already been expected prior to March 2020 — though the pandemic appears to have pushed some older people to exit the job market earlier, as seen in the chart above.

“I think that has to do with the pandemic, in the sense that people pre-emptively retired … so they might have had a plan to retire when they are 63, but the pandemic hits in March 2020,” he said.

“They leave their employment, they are maybe scared of going back to employment at 61 years old,” said Lange. “A year later, the economy recovers, but they have decided … they’re just going to retire and move their retirement up.”

But the leading factor driving down the labour market participation rate, visible in the chart above, is the country’s shifting demographics.

A recent report by BMO examined the effect of the country’s aging population on the workforce and stressed this trend began long before the pandemic.

“It is critical to note that this ongoing slow decline is almost entirely a function of underlying demographics — that is a rapidly rising share of the population in retirement age groups — and less to do with people exiting the labour force for other reasons,” the report said.

“While this demographic drain on the labour force was coming at us full speed, the pandemic appears to have created at least some additional disturbance through earlier retirements, lifestyle change and job switching.”

The report concludes that, over the longer term, the “demographic drag on labour supply will persist” in the years to come.

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