Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Canada’s most-awarded
newsroom for a reason
Stay informed for a
lot less, cancel anytime
“Exemplary reporting on
COVID-19” – Herman L
$1.99
per week
for 24 weeks
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The United States finds itself in a peculiar situation: Its companies are struggling to find workers, despite the millions of Americans who remain jobless after pandemic layoffs.

As the U.S. quickly disposes of lockdown measures, hiring has become something of a headache. Job openings have surged to a record, but small businesses are also reporting their greatest ever difficulties in filling positions.

Analysts have thrown out a handful of explanations – everything from parents struggling to find child care, to lingering health concerns, to generous income supports that have left workers in no rush to accept job offers.

Story continues below advertisement

Now that Canada is starting to reopen, can it expect the same? The coming months may be less extreme, economists said, but Canada should brace for similar troubles.

“Presumably, there’s going to be a lot of recruitment of workers” this summer, said Mikal Skuterud, a professor of labour economics at the University of Waterloo. “Every indication is we’re going to see similar kinds of pressure” as the U.S.

Canada loses 68,000 jobs in May as unemployment rate rises slightly

Canada’s ballooning mortgage debts could put a dangerous dent in entrepreneurship

One small wrinkle: Ottawa’s new hiring subsidy program doesn’t require companies to create jobs

As it stands, Canada has a shorter path to recovery. It’s recouped 83 per cent of its pandemic job losses, next to the U.S.’s 63 per cent, and done a much better job of keeping people in the labour force. Canada’s wage-subsidy program, while maligned over its hefty costs and use by profitable companies, has kept millions of workers connected to their employers.

“At the end of the day, [the subsidy] has kept employees a little more engaged with their employers” than in the U.S., said Doug Porter, chief economist at Bank of Montreal.

A concern is existing income supports, and how they affect workers’ incentives. Around three million people are receiving jobless benefits through Employment Insurance or the Canada Recovery Benefit, which can be tapped by the self-employed. Both of those programs pay out at least $500 weekly before tax.

Where they differ, however, is the treatment of earnings. Under EI, recipients must pay back $0.50 in benefits on the first dollar of employment income, whereas under CRB, the 50-per-cent clawback rate applies to annual net income above $38,000.

“The current systems benefit disproportionally the low earning self-employed – a factor that is no doubt at least partly behind the fact that self-employment has been very slow to recover,” said CIBC Capital Markets economists Benjamin Tal and Andrew Grantham in a recent report.

Story continues below advertisement

The federal budget proposed dropping CRB benefits to $300 weekly next month, with the program ending in September. The $500 floor on EI jobless benefits will also end in September. (A hiring subsidy is slated to launch this month, offsetting a portion of extra payroll costs, such as new hires, higher wages or more hours.)

“When you make those kinds of changes at the margin, you create a bit of motivation to go back” to work, Mr. Tal said in an interview.

Tentatively, there are signs of growing labour demand. In March, the number of job vacancies surged by 25 per cent from the previous month, or roughly 125,000 positions, according to Statistics Canada. (The ensuing two months may look dicey, owing to the third wave.) Furthermore, the number of job postings on hiring site Indeed Canada is about 20 per cent higher than before the pandemic.

Labour advocates say there’s a quick solution to any worker shortage: raise wages. That’s what a slew of major U.S. employers are doing, including Amazon.com Inc., Chipotle Mexican Grill Inc. and McDonald’s Corp. Others are trying to avoid that, opting for signing bonuses and other one-off incentives.

“It makes no sense to talk about a labour shortage without talking about wages,” Prof. Skuterud said. Under current circumstances, “there will be upward pressures on wages.”

He said there might be deeper structural changes to the job market, owing to a confluence of factors such as automation, reorganization, business failures and new companies. Workers may wind up looking for jobs that no longer exist, or are in short supply.

Story continues below advertisement

There’s also the scenario that workers have moved onto different sectors.

“A lot of our staff decided to change careers,” Eric Lefebvre, chief executive of MTY Food Group Inc., told analysts in April. MTY has thousands of fast-food restaurants under dozens of brands in Canada and the U.S. Some former employees have become Amazon drivers, he said, rather than wait for restaurants to fully return.

As for the U.S., the very premise of a worker shortage is contentious. Roughly 8.2 million fewer Americans are employed than when the health crisis started. And while there’s been a rush of job openings, millions of people have stopped looking for work. A recent paper from the Federal Reserve Bank of San Francisco said labour indicators are often telling different stories, but that “negative signals ... provide a better read than do the positive signals.”

It may simply take more time for Americans to re-engage with the labour market as their pandemic savings and jobless benefits dwindle.

“The minute you stop the [income] assistance, those workers will be back,” Mr. Tal said.

BMO’s Mr. Porter cautioned against reading too much into short-term labour data.

Story continues below advertisement

“This is such an unusual economic episode we’re living through,” he said. “We have to be humble and careful in assessing really any statistics.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies