Posted at 8:00 a.m.
How can there be unemployment when there is a labor shortage?
Luc Bonin
The speed at which the labor market has recovered from the pandemic continues to surprise. Quebec currently finds itself with the lowest unemployment rate in Canada and a worsening labor shortage. The number of vacant positions, both in Quebec and in Canada, is at a record level.
How can there still be unemployment? many wonder, including our reader. You should know that the number of jobs offered and the number of workers available to fill them never correspond perfectly, explains Simon Savard, senior economist at the Institut du Québec. Even in times of high unemployment, there may therefore be labor shortages in certain sectors of activity.
This is currently not the case. There are very few unemployed. In Quebec, their number is 180,000. Among those aged 15 to 64, there are even fewer, at 160,000.
These unemployed people who are looking for one are not necessarily the ones companies need.
There are structural barriers in the labor market. Some positions require qualifications or certifications that take time to obtain.
Simon Savard, Senior Economist at the Institut du Québec
This is the case for jobs in demand such as nurses or engineers, but also electricians and plumbers.
There are also geographical barriers. An unemployed person does not necessarily want to leave everything to settle far from home, where there are jobs available. There is also a seasonality factor, which means that some businesses in the tourism or fisheries sector only need labor for a few months a year and have difficulty attracting workers from elsewhere.
Unwanted jobs
“Many of the vacancies are jobs that no one wants,” also underlines Simon Savard. This is particularly the case in the service sector, such as restaurants and accommodation, due to low wages or difficult working conditions, or both. “Those who are looking for a job are less numerous and are more selective”, sums up the economist.
In its April Labor Market Survey, Statistics Canada pointed out that the number of employees earning $20 an hour or less was down and that the number of workers earning $40 an hour and more was up.
In a context of labor shortage, companies that have difficulty recruiting must make decisions. Immigration is not the only possible solution, according to the economist. Employers can pay their employees better, invest in training and turn to automating and digitizing their activities, such as online sales.
When this is not possible, the only solution may be to close up shop. “This is what is happening in the catering industry where, even if the demand is there, the number of establishments and the opening hours are decreasing. »
In the medium term, the economist from the Institut du Québec evokes two scenarios. That of the economists of Desjardins, who see the economy continuing to grow and the unemployment rate to decrease further, up to 3% in 2026, and that of the Conference Board, which predicts that the lack of work will eventually harm the economy and that the unemployment rate will rise to 4.3% in 2026.
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- 3.9%
- Unemployment rate in Quebec
Source: Statistics Canada, April 2022
- 5.2%
- Unemployment rate in Canada
Source: Statistics Canada, April 2022