Restaurants will not find their servers

The labor market has recovered the ground lost during the pandemic, notes the Institut du Québec, but it is no longer the same labor market. The sectors most affected by the scarcity of labour, such as restaurants and businesses, will have no choice but to adapt or close.

The five successive waves of health crisis have transformed the labor market in a lasting way, indicates the Institut du Québec (IDQ) in its analysis of the impact of the pandemic on Quebec workers, published this Thursday.

“The sectors that suffered the most from the shortage of labor will continue to suffer, even after the return to normal,” explains Mia Homsy, president and CEO of the IDQ.

The number of sales and service jobs has fallen by 135,700 over the past two years, the IDQ found. Those employees who lost their sales or server jobs have been taken on elsewhere, as the labor market has fully recovered the lost ground and participation and unemployment rates have returned to pre-pandemic levels.

It is a sign that the workers most affected by the pandemic have moved to other sectors of activity. This transfer happened quickly, which is a surprise for the IDQ, which anticipated that it would be longer and more difficult because the skills required by the sectors that needed workers were different from those of the available employees.

Employers have made it easier by recruiting workers with less qualifications to train them themselves, says Mia Homsy.

According to her and Simon Savard, economist and co-author of the analysis, this transformation of the labor market forces companies to live in a new reality.

The labor market has been tight since 2016, they recall. The pandemic arrived after several years of good economic growth and an increase in retirements.

Quebec is emerging from the pandemic with a number of vacant positions equivalent to the number of unemployed, which is unheard of.

All sectors of activity will have to adapt, by investing in the automation of their processes and in the training of their employees.

Act on all fronts

With the end of the pandemic and the return to normal life, student labor and immigration will reduce the pressure in the sectors most affected by the scarcity of labor, but the aging of the population will accelerate and continue to reduce the labor pool, predicts the IDQ.

“We shouldn’t think that raising immigration thresholds or postponing the retirement age will save us,” says Mia Homsy. It’s wrong. We must act on all fronts and go in all directions. »

We must continue to bet on immigration and not tax penalize workers aged 60 and over who want to continue working, but we must do more, say the authors of the analysis.

For employers, this means agreeing to offer atypical schedules to attract more employees and not being afraid to invest in automation, from automated cash registers to industrial processes.

For the government, which has already targeted sectors of activity such as health, education, construction and engineering, this means helping SMEs to invest in order to offer more interesting jobs and attract labor .

In terms of investment, which is the key to increasing productivity, Quebec is lagging behind worryingly, underlines Mia Homsy.

This chronic underinvestment persists as funding costs have been very low for a long time and are on the verge of rising again. “It’s a source of concern for Quebec’s economic potential,” she said.

Investment in machinery and equipment would allow companies to depend less on the labor component and increase their productivity.

After the pandemic storm

A full recovery

The labor market emerges from the pandemic relatively healthy. In December 2021, there were 34,100 more jobs than at the end of 2019, before the health crisis. The unemployment rate fell to 4.8% in December 2012, one of the lowest rates in Canada.

The “victims” are restored

Women and young people, who were considered to be the groups most affected by the health measures because more of them work in sectors that have had to cease their activities, such as restaurants and shops, have reentered the labor market. work, notes the analysis of the Institut du Québec.

Quebec has therefore not experienced a recession of women, a phenomenon that has been baptized she-cession. The figures indicate that women have fully re-entered the workforce and their gains have been made in full-time employment.

The employment rate for immigrants has also picked up and long-term unemployment has fallen.

No “Great Resignation” in Quebec

Unlike in the United States, where a record number of workers left the labor market at the start of the pandemic and did not return, the participation rate, or the share of the population that is working or looking for work, is approached at the end of 2021 what it was in 2019.

“We do not seem to be seeing significant exits from the labor market in Quebec, except for a few groups of workers, such as women aged 55 and over and young men. »

A drop in the labor force participation rate of 55-and-over men and women has been observed during the pandemic, however, but the data cannot tell whether these workers took early retirement or took a break. The number of new Quebec Pension Plan beneficiaries decreased slightly in 2020 and 2021, but this decrease can be explained by the decision of new retirees to postpone their benefits.

Lagging wages

Since the financial crisis of 2008, wages had increased faster than inflation in Quebec. On average, wage growth was 5.2% in 2020 and 6.8% in 2020.

This increase reflects the fact that most of the jobs lost at the start of the pandemic were low-wage jobs, which helped to push up the average salary.

In 2021, wage growth slowed to 2.1% as inflation soared. “Currently, we are seeing a loss of workers’ purchasing power,” sums up the IDQ’s chief economist, Simon Savard.

With rising inflation and labor scarcity, “the conditions are in place to see wages rise,” he says.