Canada may not have much in terms of affordable housing right now, but we sure do have a lot of jobs to give away. Doesn’t it often feel like quite literally everyone is hiring? I am a person who always likes to know “why”, but when I did research on what might be driving the massive amount of available jobs in Canada with no one wanting to fill them, I turned up with more questions than answers. One article hinted at close to a dozen different reasons that may be driving the current job market, from COVID-19 government benefits (which is no longer relevant) to fussy job seekers. The conclusion I draw is that no one truly knows what the problem is, but as per usual, I have a guess to offer: inflation.
Most people have at least a basic understanding of what inflation is – it refers to a devaluation of money over time as the costs of goods and services rise. There are
many drivers of inflation, including supply and demand of things like housing and food. There is also a repeating cycle that can help to explain inflation. Imagine a tiny fictitious society with only a few workers and two stores. Workers at one store want to be acknowledged for their hard work and dedication with a pay raise. The store owner obliges, but raises the cost of their goods to offset the increased wages. Workers at the other store, who are a vital part of this small economy not just as workers, but also as consumers, now request a wage increase to help pay for the increased cost of goods at the other store. The second store now needs to raise its prices, and so on. In any economy where money equals status, power, and a livelihood, it is inevitable that costs and wages will always creep up over time.
Minimum wage is currently $15 per hour in Ontario. It was only $10.25 per hour a decade ago, when there were far fewer jobs available. The significant wrench in my theory is this:
the rate of inflation between 2012 and now should only have demanded a minimum wage increase to $12.75 per hour. So if the current Ontario minimum wage is actually generous by inflation standards, why aren’t people filling all of these available employment positions? Because I believe the inflation rate is wrong!
Housing, food, and fuel cost increases have not been consistent with the reported inflation rates in Canada. Neither have new taxes, such as the federal carbon tax. It is well known that minimum wage has been below “living wage” for many years, if not decades, but I believe this gap is widening. Perhaps the reason that employers seem to be giving out jobs like candy on Halloween is that people are leaving jobs that don’t pay the bills, and holding out for jobs that will. I shared in the Times several weeks ago my calculation that a family wanting to rent a two-bedroom house in our area for a rent cost within the recommended one-third-of-income range would need two parents both working upwards of 12 hours per week if they were being paid minimum wage. Maybe there are so many jobs to fill lately because people are being asked to do much more work, while having nothing more to show for it, or they are doing the same amount of work but having much less to show for it.
It wasn’t long ago that I came across a social media post from a North Grenville local encouraging area businesses to register with an online directory of employers who pay a living wage. The post raised a concern that there were no local businesses registered, though this of course does not mean that there are no living wage employers locally. Paying a living wage is not just some simple idea that business owners haven’t clued into. The simple fact is that just as people struggle financially, so do businesses. Those businesses that can afford to pay minimum wage can’t necessarily afford to pay anything more, and many people don’t apply to jobs that pay under a living wage because they can’t afford to take anything less.
A phrase I hear time and time again is “people just don’t want to work anymore”. I don’t believe that. The problem is that a straight 40 hour workweek used to mean something, and now it doesn’t. Consider that a full 40 hour work week at minimum wage provides a gross income of $600, or a net income of $480 factoring in 20% taxes and deductions. If commuting to this job takes a tank of gas per week, that could mean $100, or more than 20% of your usable income is going straight to your commute, but living closer to your place of work could do even more financial damage due to much higher housing costs in more densely populated areas. This is just one example of the many situations and factors that are making honest employment not just unappealing, but downright impractical.
For those willing to work for minimum wage, now is the time. To re-use my analogy above, it seems that getting a job these days is as easy as knocking on doors to get candy on Halloween. But it’s time to stop claiming that no one wants to work anymore, because too many of these jobs just aren’t sweet as candy