The recession has only temporarily slowed the onset of workforce shortages in the Canadian economy, according to the latest Conference Board of Canada publication outlining lessons from the recession and financial crisis.
“Job losses have resulted in temporary slackness in Canada’s labour market, and boomers may be temporarily delaying their retirements due to the plunge in equity markets. However, even if some baby boomers decide to delay retirement, it will likely be for only a short period of time,” says Pedro Antunes, director national and provincial forecast. “If organizations fail to adequately plan for tightening labour markets, they could lose out on employees with the required skills, which could dampen their future growth prospects.”
From peak to trough, about 400,000 Canadians lost their jobs during the 2008-09 recession. If the recovery progresses as expected, the impact of this recession on real GDP and jobs will have been much softer than in the 1981-82 recession and even the 1991-92 recession. Even at its peak, the unemployment rate through this cycle will still be lower than the average unemployment rate between 1976 and 1999.
The single most important factor shaping the labour market over the next two decades will be the retirement of the baby boom cohort. The first members of this cohort were reaching retirement age as equity markets around the world tumbled. Boomers may hold off on retirement until stock market losses are at least partially recouped. Previous Conference Board research found that expected retirement income had a significant impact on the retirement decision.
However, older, experienced workers have been largely unaffected by the current recession-providing just a glimpse of how tight labour markets might get for this cohort as baby-boomers start to retire in earnest.
Women have generally been spared from job losses compared to men. Over the past 12 months, 320,000 men lost their jobs, compared to 80,000 women-a 4 to 1 ratio.
By far, youth have been the hardest hit. Job losses for those aged 15-24 have totalled 225,000 during the past 12 months-56 percent of all reductions, occurring in a cohort that accounts for only 15 per cent of the workforce.
Sectors such as manufacturing and construction, which have disproportionately more male workers, suffered the largest job losses in the Canadian economy. Young men, many of them construction workers, have been particularly hard hit. Job losses have been harshest on unskilled workers-wage pressures remain strong for many of the skilled trades in the construction industry.
This publication, Lessons from the Recession and Financial Crisis: Lesson 3: Recession Only Delayed the Inevitable Work Force Shortages, is part of the Conference Board’s ongoing series. Previously released publications included Overview-What Caused the 2008–09 Financial Crisis and Recession?, Lesson 1-The Financial Sector is Unique and Needs New Standards, and Lessons From the Recession and Financial Crisis: Lesson 2-Public Sector Financial Institutions Prove Their Worth. The Conference Board’s Forecasting and Analysis team has examined the developments of the past year and has drawn key lessons for the world and for Canada that deserve priority discussion among policy makers and business leaders.
For more information, visit www.conferenceboard.ca.