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Yukonomist: Vacancy vexations

Do you ever feel like your boss is asking you to do the work of two people?

Do you ever feel like your boss is asking you to do the work of two people?

You’re probably not alone.

There were 1,320 job vacancies in the Yukon, according to the most recent fourth-quarter data from Statistics Canada. That’s 410 more vacancies than in the last quarter before the pandemic.

Readers of this newspaper will have noticed big job ads recently. Pelly Construction’s ad last week listed 18 different job types, and 12 of those had multiple openings. They were looking for driller/blasters, heavy duty fuel and lube technicians, construction surveyors and safety coordinators.

Castle Rock, owned by the development corporation of the Champagne and Aishihik First Nations, was looking for 19 different kinds of workers from Mainline Hoe Operator to Professional Engineer.

Tales of labour shortages abound. The vacancy rate was 6.6 percent in the fourth quarter, high by historical standards. Five years ago, the vacancy rate was 3.2 percent.

If workers magically materialized to fill those 1,320 jobs being offered, it would grow our economy overnight by the equivalent of a couple medium-sized mines.

As you would expect, competition for labour is pushing wages up. The average weekly wage for a Yukon worker grew to $1,323 in December from $1,267 a year earlier, a rise of 4.4 per cent.

Entrepreneurs are responding to the market signals, as you can see if you visit Yukon businesses. Some are closed during hours when you might expect them to be open. Others have raised prices. Others have invested in automation.

The spread of labour-saving technology continues. Instead of hiring government employees to email you your vaccine certificate, an automated system does it. You can order fast food from your phone or a robo-screen in the restaurant. Self-check-out kiosks appear in new stores.

We can expect technology to replace workers in more and more jobs. Outside, big mining companies have been using self-driving mining trucks for years. In Alberta, they are now trialing autonomous trucks on public highways. In late 2021, they began testing systems where long-haul trucks were grouped in “platoons” where each truck’s computer kept it in close formation to the truck ahead of it. The trucks still had humans on board for safety purposes, at least for now.

A few years ago, pundits were worried that robots would steal our jobs. Instead, again at least for now, they are stepping up to do jobs for which there just aren’t enough human workers.

The strange thing about this labour shortage is that the Yukon unemployment rate was 5.8 per cent in March. That’s down from 8.2 per cent in August 2020 as COVID-19 hollowed out the tourism industry. But unemployment is still a few points higher than before the pandemic.

The number of unemployed is roughly the same as the number of job vacancies. However, it looks like the Yukon labour market has a matching problem.

It could be a skills mismatch. Pelly Construction is looking for a driller/blaster, and you might have a degree in economics. Pelly, quite wisely, is unlikely to hire you to handle the ANFO.

Or it could be working conditions. Back in 1942, one of the contractors building the Alaska Highway is said to have posted a job ad that said “Men hired for this job will be required to work and live under the most extreme conditions imaginable … Men will have to fight swamps, rivers, ice and cold, mosquitos, flies and gnats will not only be annoying but will cause bodily harm. If you are not prepared to work under these and similar conditions, do not apply.”

Few jobs offer such character-building opportunities today, but there can still be mismatches between what the boss wants and what the employee is willing to do. For example, many workers came to like working from home during the pandemic, while many bosses now want their staff back in the office every day.

Wages represent another mismatch. Workers may want higher wages to make up for the cost of living, commuting costs or don’t want the risk of interacting with possibly unvaccinated customers. Bosses may want to keep wage costs down.

Data from the Bank of Canada suggests many Canadians have larger than usual sums of cash in their bank accounts, accumulated from CERB or from being unable to spend much money during the lockdowns. Many Yukon workers are probably in a similar situation.

This means that workers have the ability to hold out a bit longer for a job with the right job description, working conditions and wages.

The result of this is more vacancies, lasting for longer until either the employer or the worker budges.

The upshot of all this is that Yukon workers have a stronger bargaining position than they did prior to the pandemic. It may take a long time for employer and worker expectations to realign and reduce the number of mismatches.

In the meantime, other factors keep emerging to destabilize the labour market. For example, the Yukon government’s record-setting spending in the coming fiscal year will involve more hiring. Insofar as people move from the private sector to the territorial payroll, that will create more private sector vacancies.

Workers are also likely to keep asking for higher wages. While that 4.4 per cent boost in weekly wages in 2021 was welcome, it was matched by a 4.4 percent rise in the cost of living. The recent geopolitical turmoil has boosted prices for gasoline and food commodities, and higher interest rates feed into monthly mortgage costs. In this situation, workers may have to ask for even bigger raises in 2022 just to keep pace.

As for employers, they may have to up their game. Some big companies Outside are recognizing employees with above-inflation raises or, if that puts too much pressure on the bottom line, other ways to recognize their contribution to the business. Losing key staff is expensive and disruptive. If you can’t match the territorial government on pay and benefits, for example, then offering a positive, purposeful and flexible workplace can help your staff decide to stay with you.

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 is a Ma Murray award-winner for best columnist.