Why there is a labour shortage on P.E.I., and yet so many unemployed

This is part one of a two-part series on the labour shortage on P.E.I. You can find Part 2 here.

The number of job vacancies on P.E.I. soared in the second quarter of this year, while the unemployment rate climbed into double digits for the first time since last summer.

It's a frustrating situation for P.E.I. businesses, particularly in the hospitality sector. A surprising number of tourists arrived on the Island when the provincial border reopened in July, but restaurants found themselves having to reduce hours and hotels were shuttering rooms due to a lack of staff.

It left a lot of Islanders wondering how it was possible that so many businesses could be short workers with so many unemployed.

It's a question that has been raised on the campaign trail.

Canada Recovery Benefit

Most federal candidates on P.EI. have agreed that the federal government needed to act and act quickly when the economy was shut down by the COVID-19 pandemic.

But there is disagreement about how to proceed with government support as the economy recovers. Conservative candidates have argued CRB has become a disincentive to work.

But the data shows that as the number of job vacancies rose through April, May and June the number of CRB applicants on the Island was falling.

Through late 2020 and early 2021 P.E.I. averaged about 3,000 CRB applicants. They began to fall in April, just as job vacancies began to rise. By the end of June, they were down to just over 2,000.

UPEI economist George Jia said the CRB may have had an impact on the job market, but he thinks the disincentive argument is oversimplified.

"I don't think they're saying, 'Oh, I'm just enjoying life and not working,'" said Jia.

"But rather they're actually, because of the buffer that the CERB and CRB are providing, they are more comfortable with choosing maybe a better occupation, a better job."

Moving out of the hospitality industry

Carol Le Maistre-Matthys worked as a server for six years, working in a number of different restaurants, but she doesn't anymore.

Le Maistre-Matthys is a third-year student in the radiography program at UPEI, and she found her employment income became increasingly precarious during the pandemic.

"As a student, that's hugely important, because you need to guarantee those hours to be able to pay for your education," she said.

Restaurants were shut down entirely early in the pandemic and then operated at reduced capacity, as well as dealing with uncertainty in the tourism market. For Le Maistre-Matthys, it meant not knowing from week to week if she would have any work, or be offered too much.

While the money was good when she was working, the stress of not having a regular schedule was wearing on her.

"Lots of servers are … letting this type of employment go because of that inconsistency," she said.

"You know, you can't live a daily life waiting 24 hours to figure out whether or not you will be called in to work."

Le Maistre-Matthys found a job at a pharmacy. She knows others who have taken work as hospital porters, found call centre jobs where they can work from home, or now work at the province's border checkpoints, where she said their experience dealing with the public is an asset.

This isn't new

While the labour shortage appears to be particularly acute this year, this is not a new problem.

Job vacancies are traditionally tracked quarterly by Statistics Canada, and a look back over the last few years shows the second quarter is when the rate of vacancies on P.E.I. is the highest.

From 2017 to 2019, the job vacancy rate, which measures the number of job vacancies versus the number of payroll employees, fell as low as two per cent in the first quarter of the year, and peaked in the second quarter of all three years. In 2018 it rose to 4.7 per cent, almost as high as the estimated 4.9 per cent this year.

Fred Bergman, an economist with the Atlantic Province Economic Council, said this should not come as a surprise. 

"You would expect job vacancies to kind of be lower in the winter time," he said.

"Then you would expect as we enter into spring and summer for things to start to pick up again, so some of those seasonal industries like construction, tourism, agriculture, fishing and so on." 

Rising job vacancies are a sign of an economy adding jobs, which is part of the natural cycle on P.E.I. Statistics Canada is measuring simply that a job is advertised and not filled. It's not about long-term vacancies. The second quarter report typically captures a lot of jobs that haven't been filled yet.

But as Le Maistre-Matthys pointed out, this year is different, and Bergman said hers is not an isolated case.

"Things open up and then they have to hire people back, but the problem is some people, you know, left that industry, i.e: they're not coming back," said Bergman.

With the uncertainty connected to pandemic restrictions, some industries also found themselves having to ramp up even more quickly than normal, making for an even greater rush to fill jobs.

Read Part 2, an international perspective, the wage gap, and going down the road, here.