Yukonomist: Navigating the labour shortage


Despite the best efforts of the Bank of Canada to slow down the economy, the Yukon’s labour shortage seems to have reached new levels.

Here are a few examples I’ve run into in just the last week or two.

Want to get your pickup fixed? A friend was told by a local dealership that the wait to see a mechanic was three months.

Want to take a visitor for dinner? Check your restaurant hasn’t moved to being open only Thursday to Saturday.

Want to get your bike tuned for the Haines relay? A local bike shop told me they were booked until July due to staff shortages.

Chatter about such topics abounds. The labour market is still suffering from the pandemic’s after-effects. According to Statistics Canada, from April 2019 to April 2023, the working age population of the Yukon grew by 2,300 people. But the total number of people working or actively looking for work only went up 400 people. What economists call the “participation rate” went down from 76.5 percent to 72.5 percent.

This means that there are still a lot of workers on the sidelines, even if our participation rate remains higher than the national average.

It’s hard to tell how specific demographic groups are changing their work habits, although we know that the participation rate for women over 25 years of age fell one-and-a-half times more than for the workforce overall. Economists in other countries see similar patterns, and think it may have to do with how women bore the brunt of pandemic disruptions to schools, elder care and home life.

With high demand for workers and limited supply, you would expect to see inflation-adjusted wages going up sharply.

However, the statistics do not show this on a territory-wide basis. The average weekly wage in the Yukon rose about 15 percent from February 2019, before the pandemic, to February 2023. That’s about the same as inflation over the same period.

You do see the effect if you drill into different types of jobs. The average weekly earnings for employees in “public administration” are up three points less than inflation over that time period, even if workers in this category still make 20 percent more than the average Yukon worker. Average weekly earnings for Yukon health-care workers, mostly government employees, fell behind inflation by more than 10 points over the period.

This is likely to change when the next round of government union wage deals are announced, but in the meantime the private sector has adapted quickly. The data suggests private sector employers have been raising wages faster than inflation.

Barring some dramatic economic news, the Yukon labour shortage will not be going away any time soon.

The question is how workers and companies adapt to it.

I once heard an economist frame this in an interesting way. He asked why Norwegians and Floridians — who both live in rich, advanced economies — wash their cars in such different ways. Norwegians almost always use an automated drive-thru car wash. In Florida, many go to small businesses where a team of a half-dozen humans gives your car a rapid Formula-One pitstop style manual wash.

It’s because labour is scarce and expensive in Norway, but not in Florida.

The Yukon is now moving in the Norwegian direction. We will have to change our assumptions about how the market delivers the goods and services we need. Any managers with a foot in the Florida model will face the harshest impacts from the labour shortage.

The Yukon private sector moved first to replace humans with machines, as you see at grocery check outs or fast-food counters.

Expect more of this from firms with tech-savvy managers and capital to invest. Entrepreneurs are starting businesses with online-only payments and no bookkeepers. Hotel guests may use their phones to check in and unlock their room doors.

Government, however, is catching up. A computer emailed me my vaccination certificate with no human involvement. I just paid my property taxes and submitted my Home Owner’s Grant form online rather than having it stamped manually at Whitehorse City Hall. Government managers will have noticed that ChatGPT does a pretty good job drafting a press release.

Firms will need to adapt. This may mean investing in automation, paying your remaining staff significantly more to keep them, and adapting products and raising prices to keep margins high.

Smart entrepreneurs will also be trying to improve their overall “employee value proposition.” This can mean offering more flexible work options, new benefits and a workplace where workers can learn and develop. It also means creating a more positive environment at work.

Last year managers were talking about “quiet quitting.” This year the trend is “rage applying,” where after the boss does something unpleasant the annoyed employee goes on Indeed.com and hits “apply” at a dozen other jobs.

Firms that do not adapt to all this will face increasingly tough sledding.

As for workers, if you haven’t had a chat with your boss about inflation and how valuable you are to the team, you should. If you work for a firm that is not on a path to support significantly higher wages, you might want to consider switching jobs.

And if you want to switch jobs, the digital revolution is also disrupting higher education. Instead of taking two or four years off for a traditional program, there are now many “micro-credentials” you can take fully or partly remotely from your Yukon kitchen table.

Want to be a drone pilot? Sign up at BCIT for the four-week Drone Applications for Environmental Risk Assessment.

Or maybe you want to tune up your resume to move into management? Try Yukon University’s two-day course called The ABCs of Supervising Others.

Consumers will also have to adapt to this new world where labour-intense services are scarce and expensive. Paradoxically, people will find themselves making more money than ever before but also having to learn new skills. Among the biggest winners of the labour shortage may be all those Youtubers who offer three-minute videos on how to fix holes in your drywall, make Korean barbeque dinners or change the chain on your bike.

Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.