E Canada’s Job Market Will Have A Difficult Hill To Climb To Recover Lost Jobs

More than one year into the pandemic, and despite a speedy economic and jobs rebound in March, how long it will take for Canada’s labor market to fully recover is still very much unknown.

This is because the pandemic recession and the related job losses have not only been very unusual but also very uneven across different demographic and occupational groups. As well, Canada’s post-world war two experience with job recoveries seems to have little relevance in answering this puzzle.

After all, the pandemic triggered downturn in 2020 was entirely a supply shock due to Covid-19, and the supply shock spread across the entire world.

Further complicating any understanding of the full aftermath, Canada, the US, and indeed all advanced economies, are providing unprecedented massive injections of fiscal and monetary support to dampen the recession.

Once again, past business cycles in Canada provide us with only limited historical insights, since past recessions were repeatedly demand induced, and in addition, did not attract comparable hefty fiscal and monetary supports.

And then there is the different job market impacts from the pandemic downturn to consider. Thus, a professional trained in finance or technology would find today’s job outlook vastly better than last year’s and almost close to normal, notwithstanding the challenges of working from home for an extended period of time.

Further, Canadian employment in the public service, education and manufacturing already exceeds pre-crisis levels.

But if you are a young person embarking on a new career, and particularly someone who is looking for opportunities in higher education, hospitality or tourism, the job opportunities are quite grim.

And then there is the puzzling question - what does a healthy job market recovery actually look like? A simple starting point to keep in mind is that as of March 2021 there were 295,000 fewer Canadians employed than when the crisis started.

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