the rennie landscape - fall 2022

economy

AN OFFER YOU CAN REFUSE—IF YOU’RE THERE TO REFUSE IT The persistence of past unfilled jobs has, in many industries, yielded increases in offered wages. It doesn’t seem to be helping.

It’s no secret that as Canada’s labour markets have tightened over the past few years (the Covid blip notwithstanding), job vacancies have risen. Indeed, the national job vacancy rate—calculated as the proportion of unfilled positions as a share of all positions, both filled and unfilled—reached a new quarterly high in Q2 2022, at 5.9% (up from 5.2% in Q1 and the previous high of 5.4% in Q3 2021). In British Columbia the most recent figure is a whopping 6.8%—higher than the national average and greater than the rate in the province’s largest metro area of Vancouver (6.5%). This reality can be viewed in both a positive and a negative light: on the one hand, a high vacancy rate signals that companies want to hire and, presumably, grow; on the other hand, a persistently elevated job vacancy rate means we are leaving economic growth on the table—production and incomes that could otherwise be realized are not.

The job vacancy challenge in BC (and across Canada) is pan-sector in its nature. The highest job vacancy rates we are seeing today are in construction (10.6%) and accommodation and food services (12.2%). These sectors have also seen their job vacancy rates rise considerably over the past year: by 3.2 percentage points in the former and by 2.4 in the latter. In turn, these high and rising vacancy rates have yielded increasing wages on offer, as employers become increasingly desperate for workers. In BC’s construction sector, average offered wages have risen by 10.0% over the past year (to $28.65/hour), while in accommodation and food they’ve

risen by 8.0% (to $17.60/hour). Rising wages represent a valid and

market-driven inducement to expanding the workforce; however, with a provincial unemployment rate of 4.8%, our best bet for filling these roles is increased in-migration (more on that later).

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