The novel coronavirus pandemic quickly turned what was a jobseekers’ labour market into a wasteland with millions out of work. What it is doing to wages, though, is less clear.
Research suggests many employers are loath to cut pay for existing employees, fearful of the impact this can have on morale. Instead, they prefer letting go of some workers and preserving the wages of those who stay. Companies also often implement pay and hiring freezes to help keep costs in check.
The result is that wages flatline for a while — sometimes years — until the job market heats up again.
The overall impact of COVID-19 so far seems to be similar, according to Sudarshan Sampath of PayScale, a compensation software and data provider that tracks both the U.S. and Canadian markets.
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“We don’t necessarily see wholesale drops in wages. We see a broad slowdown in wages generally,” Sampath says.
But the unprecedented layoffs triggered by the health emergency are making it harder for economists to discern what is happening to workers’ pay.
“Averages really change when the distributions underneath change,” says economist Brendon Bernard of Indeed Canada.
For example, if it’s mostly younger, lower-paid employers who are let go en masse, overall overage pay would increase, he notes.
The Canada Emergency Wage Subsidy — which allows eligible employers to tap federal coffers to pay for a portion of employee wages — may have also had an impact on employers’ decisions to cut pay versus laying off employees, Bernard says. Workers might also be more understanding of companies’ financial difficulties in this recession and more willing to accept a pay cut, he adds.
Still, one thing is already clear, both Sampath and Bernard say: when it comes to wages, not everyone has been affected the same way.
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Pay cuts for some, raises for others
One group of employees who’ve seen a significant hit to their incomes is those working in sales, Sampath says.
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“It is a fascinating job to actually keep a track of because every industry has sales,” he says. “It‘s just a marker of what I would consider the true economy.”
And across the economy, sales cratered as government directives ordered consumers to stay home.
For sales professionals, whose compensation is usually tied to performance, that likely meant missing targets that would have been set before the onset of the pandemic, Sampath says.
But in the accommodation and food services sector, which led job losses in Canada, two opposite dynamics seem to be at play, Bernard says, citing Statistics Canada’s latest Survey on Business Conditions, which reflected data collected in May.
While just over nine per cent of businesses surveyed in the industry said they cut wages and salaries, an almost equal percentage said they had increased pay.
“You’ve got competing effects of a dramatic hit to business activity and at the same time of heightened risks for workers still going into work,” Bernard says.
Similarly, the need to compensate low-paid essential workers for the health risk tied to COVID-19 is likely why a greater share of businesses in the retail sector said they were upping pay, compared to those who said they were cutting compensation, Bernard says.
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It’s not clear whether and to what extent some of the pay gains tied to COVID-19 will be temporary. Loblaws, Metro and Sobey’s, for example, ended employee wage top-up programs in mid-June.
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Overall, 11 per cent of businesses said they were reducing salaries or wages outright, with another 6.5 per cent freezing pay, Bernard says.
The pandemic has also prolonged the suffering in Canada’s oil patch, Sampath says.
“If you look at Edmonton and Calgary pay trends, really, since 2018, (they have) pretty much flatlined,” he says.
Vancouver, Montreal and Toronto, by contrast, have seen wage growth of 3.3 per cent, 2.7 per cent and 2.5 per cent, respectively, in the first three months of 2020 compared with the same period last year, Sampath says.
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That’s largely thanks to an abundance of professionals, who have easily transitioned to working from home, he says.
In general, he adds, white-collar industries have also had an easier time adapting to the new reality of COVID-19.
“In software and finance, you can leverage technology to make something run faster, for example, or have a better data warehouse or reduce latency,” he says. “And that flexibility provides meaningful work and meaningful output for employees in those sectors.”
Some 38 per cent of Canadian tech startups, for example, said they were pivoting their business activities, according to an April survey by Prospect, a non-profit that supports the tech community.
The tech industry, in particular, stands out for faring through the crisis relatively unscathed, Sampath says.
“You’re still seeing wages just generally globally for technology jobs increasing because there isn’t actually enough of those folks,” he says.
Even in the tech sector, the economic shock hasn’t been painless. By April, Canadian tech startups had seen a 61 per cent collapse in job creation compared with the monthly average of the first three months of 2020, according to the Prospect report. Eighteen per cent of companies said they were trimming pay for current employees, while 14 per cent said they were reducing salaries for future hires.
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But that short-term turmoil may have something to do with companies quickly changing direction because of the pandemic, says Marianne Bulger, CEO and co-founder of Prospect.
“If they’re pivoting their business activities, they’re definitely rethinking who they need to hire,” she says.
And with COVID-19 likely to spur more innovation, the need for tech workers would likely become even more urgent, the report predicted.
“Let’s not be fooled. Canada is now facing an even bigger talent shortage,” it concluded.
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Job ads with no details about pay
As Canada’s job market begins to rebound from the abyss — the economy added almost one million jobs in June, though it remains nearly two million jobs short of pre-pandemic levels — some are concerned about a lack of details in new job ads.
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The share of job postings that carry information about remuneration “has completely dropped off,” says Allison Venditti, who runs Careerlove, a career coaching service for parents.
The Canadian job market has always been rather opaque when it comes to compensation, with the exception of unionized and public-sector jobs for which employers are mandated to post pay.
Still, around 35 per cent of the non-union job ads Venditti says she was tracking across industries and job boards before the pandemic used to list details about what salary or pay range future hires could expect. Now, though, that information is becoming harder and harder to come by, according to Venditti.
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She has two possible explanations for that. One is that cash-strapped employers are trying to hire a single person to do what would have been two separate jobs before COVID-19.
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The other explanation is that companies are “trying to get a deal,” Venditti says.
“I guess they’re hoping people will just shut up and take it.”
Venditti worries about what this could mean for pay equity.
“We know women are paid less. We know people of colour are paid less. We know people with disabilities are paid significantly less,” she says. “I think this is going to make it worse.”
In 2018, female employees of prime working-age earned 87 cents for every dollar earned by men, according to data from Statistics Canada. In 2011, researchers Sheila Block and Grace-Edward Galabuzi found that Canadians of racialized background earned only 81 cents for every dollar paid to their Caucasian peers. And full-year, full-time workers with severe disabilities have incomes that are, on average, 84 per cent of those with no disabilities, according to a 2018 report from Statistics Canada.
Evidence suggests transparency laws have helped shrink the gender pay gap in Canada. For example, provincial legislation mandating the disclosure of salary information for university faculty reduced the gender pay gap by between one and three percentage points on average, according to Statistics Canada.
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The federal government and Ontario have passed broad pay-equity legislation that has received royal assent. However, neither is currently in force.
A lack of pay transparency could also prove harmful to Canada’s tech sector, Bulger says.
A more favourable geopolitical climate and friendly immigration policies have given Canada a competitive advantage over the U.S. in the eyes of many of the tech world’s best and brightest, she says.
But a lack of information and access to data on compensation and where Canadian salaries stand on the global stage could eventually undo those gains, she warns.
“We could lose big time in two years if we realize that we have been severely underpaying talent and they are all leaving to go back to the U.S.”
WINNIPEG – Some 250 coloured tacks pepper a large-scale world map among bookshelves at Whodunit Mystery Bookstore.
Estonia, Finland, Japan and even Fenwick, Ont., have pins representing places outside Winnipeg where someone has ordered a page-turner from the independent bookstore that specializes in mystery and crime fiction novels.
For 30 years, the store has been offering fans of Agatha Christie’s Hercule Poirot or Arthur Conan Doyle’s Sherlock Holmes a place to get lost in whodunits both old and new.
Jack and Wendy Bumsted bought the shop in the Crescentwood neighbourhood in 2007 from another pair of mystery lovers.
The married couple had been longtime customers of the store. Wendy Bumsted grew up reading Perry Mason novels while her husband was a historian with vast knowledge of the crime fiction genre.
At the time, Jack Bumsted was retiring from teaching at the University of Manitoba when he was looking for his next venture.
“The bookstore came up and we bought it, I think, within a week,” Wendy Bumsted said in an interview.
“It never didn’t seem like a good idea.”
In the years since the Bumsteds took ownership, the family has witnessed the decline in mail-order books, the introduction of online retailers, a relocation to a new space next to the original, a pandemic and the death of beloved co-owner Jack Bumsted in 2020.
But with all the changes that come with owning a small business, customers continue to trust their next mystery fix will come from one of the shelves at Whodunit.
Many still request to be called about books from specific authors, or want to be notified if a new book follows their favourite format. Some arrive at the shop like clockwork each week hoping to get suggestions from Wendy Bumsted or her son on the next big hit.
“She has really excellent instincts on what we should be getting and what we should be promoting,” Micheal Bumsted said of his mother.
Wendy Bumsted suggested the store stock “Thursday Murder Club,” the debut novel from British television host Richard Osman, before it became a bestseller. They ordered more copies than other bookstores in Canada knowing it had the potential to be a hit, said Michael Bumsted.
The store houses more than 18,000 new and used novels. That’s not including the boxes of books that sit in Wendy Bumsted’s tiny office, or the packages that take up space on some of the only available seating there, waiting to be added to the inventory.
Just as the genre has evolved, so has the Bumsteds’ willingness to welcome other subjects on their shelves — despite some pushback from loyal customers and initially the Bumsted patriarch.
For years, Jack Bumsted refused to sell anything outside the crime fiction genre, including his own published books. Instead, he would send potential buyers to another store, but would offer to sign the books if they came back with them.
Wendy Bumsted said that eventually changed in his later years.
Now, about 15 per cent of the store’s stock is of other genres, such as romance or children’s books.
The COVID-19 pandemic forced them to look at expanding their selection, as some customers turned to buying books through the store’s website, which is set up to allow purchasers to get anything from the publishers the Bumsteds have contracts with.
In 2019, the store sold fewer than 100 books online. That number jumped to more than 3,000 in 2020, as retailers had to deal with pandemic lockdowns.
After years of running a successful mail-order business, the store was able to quickly adapt when it had to temporarily shut its doors, said Michael Bumsted.
“We were not a store…that had to figure out how to get books to people when they weren’t here.”
He added being a community bookstore with a niche has helped the family stay in business when other retailers have struggled. Part of that has included building lasting relationships.
“Some people have put it in their wills that their books will come to us,” said Wendy Bumsted.
Some of those collections have included tips on traveling through Asia in the early 2000s or the history of Australian cricket.
Micheal Bumsted said they’ve had to learn to be patient with selling some of these more obscure titles, but eventually the time comes for them to find a new home.
“One of the great things about physical books is that they can be there for you when you are ready for them.”
This report by The Canadian Press was first published on Sept. 15, 2024.
MONTREAL – Canada’s labour minister is praising both Air Canada and the union representing about 5,200 of its pilots for averting a work stoppage that would have disrupted travel for hundreds of thousands of passengers.
Steven MacKinnon’s comments came in a statement shared to social media shortly after Canada’s largest air carrier announced it had reached a tentative labour deal with the Air Line Pilots Association.
MacKinnon thanked both sides and federal mediators, saying the airline and its pilots approached negotiations with “seriousness and a resolve to get a deal.”
The tentative agreement averts a strike or lockout that could have begun as early as Wednesday for Air Canada and Air Canada Rouge, with flight cancellations expected before then.
The airline now says flights will continue as normal while union members vote on the tentative four-year contract.
Air Canada had called on the federal government to intervene in the dispute, but Prime Minister Justin Trudeau said Friday that would only happen if it became clear no negotiated agreement was possible.
This report from The Canadian Press was first published Sept. 15, 2024.
When it comes to plant-based alternatives, Canadians have never had so many options — and nowhere is that choice more abundantly clear than in the milk section of the dairy aisle.
To meet growing demand, companies are investing in new products and technology to keep up with consumer tastes and differentiate themselves from all the other players on the shelf.
“The product mix has just expanded so fast,” said Liza Amlani, co-founder of the Retail Strategy Group.
She said younger generations in particular are driving growth in the plant-based market as they are consuming less dairy and meat.
Commercial sales of dairy milk have been weakening for years, according to research firm Mintel, likely in part because of the rise of plant-based alternatives — even though many Canadians still drink dairy.
The No. 1 reason people opt for plant-based milk is because they see it as healthier than dairy, said Joel Gregoire, Mintel’s associate director for food and drink.
“Plant-based milk, the one thing about it — it’s not new. It’s been around for quite some time. It’s pretty established,” said Gregoire.
Because of that, it serves as an “entry point” for many consumers interested in plant-based alternatives to animal products, he said.
Plant-based milk consumption is expected to continue growing in the coming years, according to Mintel research, with more options available than ever and more consumers opting for a diet that includes both dairy and non-dairy milk.
A 2023 report by Ernst & Young for Protein Industries Canada projected that the plant-based dairy market will reach US$51.3 billion in 2035, at a compound annual growth rate of 9.5 per cent.
Because of this growth opportunity, even well-established dairy or plant-based companies are stepping up their game.
It’s been more than three decades since Saint-Hyacinthe, Que.-based Natura first launched a line of soy beverages. Over the years, the company has rolled out new products to meet rising demand, and earlier this year launched a line of oat beverages that it says are the only ones with a stamp of approval from Celiac Canada.
Competition is tough, said owner and founder Nick Feldman — especially from large American brands, which have the money to ensure their products hit shelves across the country.
Natura has kept growing, though, with a focus on using organic ingredients and localized production from raw materials.
“We’re maybe not appealing to the mass market, but we’re appealing to the natural consumer, to the organic consumer,” Feldman said.
Amlani said brands are increasingly advertising the simplicity of their ingredient lists. She’s also noticing more companies offering different kinds of products, such as coffee creamers.
Companies are also looking to stand out through eye-catching packaging and marketing, added Amlani, and by competing on price.
Besides all the companies competing for shelf space, there are many different kinds of plant-based milk consumers can choose from, such as almond, soy, oat, rice, hazelnut, macadamia, pea, coconut and hemp.
However, one alternative in particular has enjoyed a recent, rapid ascendance in popularity.
“I would say oat is the big up-and-coming product,” said Feldman.
Mintel’s report found the share of Canadians who say they buy oat milk has quadrupled between 2019 and 2023 (though almond is still the most popular).
“There seems to be a very nice marriage of coffee and oat milk,” said Feldman. “The flavour combination is excellent, better than any other non-dairy alternative.”
The beverage’s surge in popularity in cafés is a big part of why it’s ascending so quickly, said Gregoire — its texture and ability to froth makes it a good alternative for lattes and cappuccinos.
It’s also a good example of companies making a strong “use case” for yet another new entrant in a competitive market, he said.
Amid the long-standing brands and new entrants, there’s another — perhaps unexpected — group of players that has been increasingly investing in plant-based milk alternatives: dairy companies.
For example, Danone has owned the Silk and So Delicious brands since an acquisition in 2014, and long-standing U.S. dairy company HP Hood LLC launched Planet Oat in 2018.
Lactalis Canada also recently converted its facility in Sudbury, Ont., to manufacture its new plant-based Enjoy! brand, with beverages made from oats, almonds and hazelnuts.
“As an organization, we obviously follow consumer trends, and have seen the amount of interest in plant-based products, particularly fluid beverages,” said Mark Taylor, president and CEO of Lactalis Canada, whose parent company Lactalis is the largest dairy products company in the world.
The facility was a milk processing plant for six decades, until Lactalis Canada began renovating it in 2022. It now manufactures not only the new brand, but also the company’s existing Sensational Soy brand, and is the company’s first dedicated plant-based facility.
“We’re predominantly a dairy company, and we’ll always predominantly be a dairy company, but we see these products as complementary,” said Taylor.
It makes sense that major dairy companies want to get in on plant-based milk, said Gregoire. The dairy business is large — a “cash cow,” if you will — but not really growing, while plant-based products are seeing a boom.
“If I’m looking for avenues of growth, I don’t want to be left behind,” he said.
Gregoire said there’s a potential for consumers to get confused with so many options, which is why it’s so important for brands to find a way to differentiate themselves, whether it’s with taste, health, or how well the drink froths for a latte.
Competition in a more crowded market is challenging, but Taylor believes it results in better products for consumers.
“It keeps you sharp, and it forces you to be really good at what you’re doing. It drives innovation,” he said.
This report by The Canadian Press was first published Sept. 15, 2024.
