I am beyond fortunate to have a beautiful family with children who are either in university or about to attend university. All are finding it more challenging than last summer and the summer before that to find gainful employment. Is this scientific? No, it certainly is not. But Canada's summer job scene is losing its sizzle, signalling a potential cooldown in its once red-hot labour market. According to recruitment company Indeed, employers are shying away from hiring temporary workers and interns this year. Summer job postings have taken a 17% dip compared to last year, while internships have plummeted by 19%. The rising costs and interest rates are finally damaging the once-so-hot hiring siesta.
A senior economist with recruiting firm Indeed, Brendon Bernard, aptly describes the situation as the "huge boom in hiring appetite" fizzling like a deflated balloon. However, let's not forget that even though demand for summer gigs has cooled, it's still warmer than in the pre-pandemic era. To be fair, summer job postings have increased by 55% since 2019, while internships have increased by a modest 18%. So, it's not exactly an epic jobseekers' market like last year, but it's not a total bust either. The warning sign is in place, and the idea of slower development in tandem with lower GDP growth is yet another group of warning signs that has me personally concerned.
Swept Under the Rug?
Despite facing headwinds like high inflation and interest rate hikes, Canada's labour market has been surprisingly tight up until now. Currently, unemployment hovers around 5%, and wage growth is outpacing inflation, making it a sticky situation for employers. The labour shortage saga has been ongoing since 2021, as indicated by the Bank of Canada's Business Outlook Survey and the raw data.
Initially, more than 60% of companies were waving the labour shortage flag, struggling to meet unexpected demand in the third quarter of 2022. While things have improved, businesses still face the same hurdle today to a lesser extent. Even Bank of Canada Governor Tiff Macklem admits that the labour market remains stretched, despite attempts to cool it down. But when you ask those employers around you what the story ends up telling is that although labour shortages have been the main plot, the subplot has been a major lack of skill. Have we swept this problem under the rug? The answer, in my humble opinion, is yes. Employers are not getting the pool of skilled applicants they once were and when you factor in the notable changes in hiring infrastructure from increased contract positions to seasonal labour increases, to part-time hiring, it becomes painfully obvious that we are trending down a road of uncertainty where those who are skilled, despite their best efforts, will still end up having multiple careers during their working lifespan and may have no gainful meaningful employment in their area of expertise while Canada's fake economy continues to be papered with debt in an effort to generate something, anything organic and good. It just isn't happening. If printed money, skyrocketed unaffordable real estate, lacks of career positions, booming ineffective immigration and lack of properly funded services is what you signed up for as a Canadian reading this then we might as well just give ourselves to the U.S.
And heads up when you think I am being facetious or less than xenophobic about my Country. It's the exact opposite. Our families have worked far to hard to build this that we should allow it to collapse under a pile of brittle promises and instability. Debt alone will be our death if we are not certain so when I talk about warning signs it is a precursor to doing something different. To acting in a different way. For the old days of a "balanced" "paper" portfolio are over. Total debt now stands at an undeniable troublesome level of approximately $1.2 trillion, of which approximately $35K is your individual share on top of your own personal debt load. So, when I see these seemingly small warning signs that basically very few at large take heed of they are warnings that the ship's metal is fragile and if the wave is large enough the hull will break.
The truth is, that finding skilled workers is about as easy as panning for gold in a Canadian winter. Perhaps it's time for employers to invest in physical gold and silver ownership – they might need it to weather the stormy economic waters that most certainly lie ahead. Of course, they could just continue to sweep it all under the rug… I for one love that idea because my silver and gold will be worth so much more when the cleaner comes to shake that carpet out and finds what lies underneath.
Yours to the Penny,
Darren V. Long