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It won’t happen in 2023 | The end of the labor shortage



What if, rather than predicting 2023, our columnists instead tried to imagine what won’t happen?

Despite the high probability of an economic slowdown anticipated for the start of the next year, the labor shortage that afflicts many businesses in the manufacturing, construction and social services sectors, in particular, will not be reduced. not for all that in Quebec in 2023. Because of the vacancies, there will remain again and again, and this, even if the number of unemployed increases due to a possible recession.

The risks of recession in 2023 are increasingly real and they have only increased during the fall, fueled by high inflation and soaring interest rates which have affected the purchasing power of consumers to eventually fuel a slowdown in economic activity, which the Canadian monetary authorities wanted.

Even Prime Minister François Legault mentioned after his election last October the possibility that the Quebec economy is 50% at risk of falling into recession during 2023.

If the economy does not contract and only stagnates, Quebec could then escape stagflation, which is characterized by economic activity that is at a standstill, but which is hit by high inflation and a significant increase in unemployment.

It is the “significant increase in unemployment” variable that does not fit into the equation of a possible stagflation of the Quebec economy.

First, because the unemployment rate in Quebec in November reached a low of 3.8%, which reflects a situation of full employment compared to the posted unemployment rate of 5.1% for the whole of Canada.

Second, Quebec still recorded in the third quarter the second highest job vacancy rate in Canada, just behind British Columbia, with a total of 244,000 jobs available, according to Statistics Canada. Jobs that do not find takers and that inflate the problem of the labor shortage.

Third, more than 150,000 permanent jobs will become available in 2023 due to the retirement of as many active workers who have reached the age to leave the labor market.

According to the Government of Quebec, between 2017 and 2026, the aging of the population will have resulted in the loss of 1.4 million workers from the baby-boomer generation, employees whom the demographic imbalance prevents from adequately replacing.

Vacancies to secure

This means that even if the economic situation deteriorates more significantly than expected in 2023 and leads to more layoffs than anticipated, Quebec should still find itself with a surplus of available jobs.

Currently, Quebec has a vacancy rate of 5.8% while it has an unemployment rate of 3.8% because there are more positions to fill than applicants for these jobs.

If economic activity were to contract during the first half of 2023 and drag the Quebec economy into recession, many companies currently recruiting could simply decide not to fill vacant positions without cutting existing staff.

Every week I meet with presidents of companies in all industries and in the past two years I haven’t heard one tell me they don’t have labor needs. work to fill.

The shortage of workers – whether specialized or simple clerks – is having a major impact on Quebec businesses, which therefore have leeway in the event of an economic slowdown and a tightening of their activities.

Although there may be disparities depending on the sector of activity, as explained to me by Sami Bibi, an economist at Statistics Canada.

You may badly need to fill 100 nursing positions and end up with 100 electricians available because they have lost their jobs. Or regional disparities, with 100 jobs for minors to be filled in Abitibi and 100 employees in the accommodation sector who have just been made redundant in Montérégie.

Adequacy will not always be obvious and it will be necessary to achieve a certain link according to the different realities that will emerge according to the evolution of the economic situation.

But, as a general rule, the particular demographic situation of Quebec and the abundance of positions to be filled constitute in themselves a fairly tight bulwark in the face of a deterioration in economic conditions and those apprehended in terms of employment.

The new economic reality that must be anchored in the ecological and energy transition will in itself generate new labor needs that will be added to those already existing.

The shortage of talent and labor will certainly not be resolved with the slowdown or the recession that we expect for the beginning of 2023. We still have years to live with this reality.

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