Posted at 12:00 p.m.
Mr. Prime Minister, I have heard you praise the benefits of labor shortages many times. On May 6, you went so far as to say that it was a “mosusse of good news for Quebec”.
Certainly, the labor shortage is putting pressure on wage increases and offering employment data that would make any politician dream. However, this issue has its share of negative effects, both for citizens and for businesses, regions and our economy.
Labor shortages drive up wages. All companies are revising salaries upwards because they want to attract candidates and, above all, keep their employees. According to our Business Barometer index, salary increase projections for SMEs have never been so high.
Since the beginning of 2022, each month, we have again broken the record reached the previous month. I can also confirm that many SME managers entrust us with increasing their salaries by 10%, 15%, or even more than 35%. In fact, the Randstad company finds that wages for some jobs have increased by more than 20% between 2019 and 2022.
A short-lived joy
If there is any reason to rejoice, it will be short-lived, because the economic opportunities that are soaring due to the lack of employees will not help public finances in the long term, nor for that matter the quality, the price of services and their availability for citizens, this last point being a source of concern for 86% of Quebecers, according to a Léger survey1.
As the payroll line item grows, other costs are also putting pressure on businesses. It is a crying problem. In fact, 60% of SMEs indicate that it significantly harms their business.
Companies want to increase their productivity and take the turn of automation. But, when costs soar in all directions, there is a limit so that SMEs can find the sums to invest, especially when they have to tighten their belts after two years of pandemic which have left them in debt and with great difficulties. profitability.
Our Quebec economy is made up of small businesses: seven out of ten have fewer than ten employees and half of them have fewer than five employees. For the latter, it is more difficult to absorb large cost increases and easily compensate for the loss of a single worker.
In fact, the first consequence of the lack of employees on SMEs is the increase in the working hours of their managers. This concerns 63% of SMEs in Quebec. This work overload does not only affect entrepreneurs.
The second consequence is an increase in hours for some employees in 45% of cases. A race, like a marathon, has a beginning and an end. With the shortage of labor, the finish line of the race in which entrepreneurs and their employees find themselves is only getting longer, and the difference in altitude is increasingly important.
Difficult and unprecedented decisions
Every day, many entrepreneurs have to make difficult and counter-intuitive decisions. Let us cite, for example, this transport company in Bas-Saint-Laurent which has to sell six trucks due to a lack of employees or even this small accounting firm in the Outaouais which lost $100,000 in revenue due to a lack of candidates in the region.
39% of SMEs have to make the difficult decision to say no to economic opportunities. These contract losses are not conducive to their recovery, their prosperity, or the strength of the economic fabric of the regions of Quebec.
Moreover, what impact will wage inflation caused by labor shortages have on school dropouts? Jobs are available in the hundreds of thousands. A young person could be tempted to immediately enter the full-time job market without completing their studies. If that should happen, it will not be good news for Quebec.
Moreover, never have employment data been so favorable to successful employment integration for newcomers. So let’s look at increased immigration in a positive way and as a way to contribute to the collective wealth of our nation.
To truly reduce the wealth gap with our neighbour, Ontario, we need strong SMEs, diversified economic regions, healthy entrepreneurs and employees, not to mention that we need to improve the level of diplomas and integrate new talents.
In Quebec, the labor shortage has many negative effects that far outweigh the positive effects.
This societal issue must be tackled head-on in such a way as to include and mobilize all of Québec’s driving forces – entrepreneurs, workers and political decision-makers – in order to benefit from it for all in the short, medium and long term. Above all, we must avoid embarking on a path that could divide and weaken our economic and collective potential.