According to the most recent survey with Canada statistics, the Canadian economy lost jobs for the second month in a row in May, with the majority of the employment lost being part-time.
While provinces try to reduce COVID-19 limitations in the coming months, analysts warn that recouping this lost employment may take longer than expected, resulting in a labor crisis this summer.
TD Senior Economist Sri Thanabalasingam reported on Friday, “While losses were not as large as what we saw in April, the hole to climb out of is now deeper.”
In May, Canada dropped 68,000 jobs, adding to the 207,000 lost in April.
Part-time work accounted for the majority of job losses, causing 54,000 jobs lost. Meanwhile, after losing 129,000 jobs in April. Though full-time employment remained unchanged in May.
The largest job losses occurred last month in British Columbia and Nova Scotia, where strict public health measures were in place to battle the third wave of COVID-19.
“If you lost your job, we’re here for you,” Prime Minister Just Trudeau shared in a press conference Friday.
“The wage subsidy, the stronger and more flexible EI, the Canada Recovery Benefit – those were designed for you. We have your back as long as this crisis lasts.”
While job improvements are projected in the following months as provinces reopen and firms increase recruiting intentions in the aftermath of a comprehensive vaccination distribution plan, Thanabalasingam said May’s decrease is “concerning.”
“With fewer people engaged in the labor market, Canada could face labor shortages as demand for labor recovers faster than supply,” he said.
“Given that students were an important segment of the population that left the labor force, they may not quickly return to the labor market as provinces reopen their economies and part-time jobs hiring ramps up,” he said.
“This could lead to a more gradual pick-up in employment, one that spans the summer months instead of it all occurring in June or July as provinces reopen.”
According to Mikal Skuterud, a labor economics professor at the University of Waterloo, it is fair to expect labor shortages to become a problem when public health restrictions are reduced.
“To what extent these part-time workers will fill those vacancies is an open question,” he told Global News.
He talked about two main problems that occurred in this situation.
“First, workers may be reluctant to accept new jobs due to ongoing virus fears, generous income support programs, and issues with finding child care,” Skuterud said.
“Second, the job growth may be in occupations that are different from the occupation where jobless workers have worked before. Making the transition to different occupations may require learning new skills, which takes time.”
Royce Mendes, senior economist at CIBC Capital Markets wrote a report on Friday, “It’s likely not to be as acute an issue given the less generous subsidies and increased reliance on programs that keep the employer-employee connection intact north of the border.”
Glenda Bozeman – Business and Services
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