Article content continued

Using all these tools to increase labour supply, employers have capped conventional measures of shortages and their wage bill, a tribute to their adaptability faced with the reality of current and impending shortages. Note the emphasis on expanding the supply of labour, especially of our most valuable workers, as the solution, not the wooly idea circulating this summer that restricting hours worked would somehow help the economy.

However, employers know that many of these tactics can’t be sustained, which is why they are concerned about shortages now and in the near future. Some of the disconnect between how businesses and economists approach the question of shortages revolves around this time frame. Economists look for evidence of shortages in data, which inevitably are backward looking. Firms approach the question with an eye to the future, knowing they will soon have to replace their oldest workers with new sources of labour.

The future supply of labour is worrisome for many employers. One of the most striking divides in today’s labour market is the record gap between unemployment for adults and youths. Adult unemployment is close to a record low, while it remains stubbornly high among youths (Ontario’s youth unemployment rate of 16% is nearly three times as high as for adults). High unemployment among youths creates the statistical illusion that there is a large pool of labour available to work, raising questions about the existence of shortages. However, this calculation is misleading because employers don’t regard youths, especially teenagers, as replacements for their best workers who are approaching retirement. This increases the need for employers to encourage their older workers to stay in the labour force, often working very long hours. A further complication is that almost half of full-time students are looking for work, but their studies obviously limit the time and energy they can devote to work. For employers, this rules out many full-time students as a viable job candidate. For all these reasons, employers do not regard some youths as a substitute for their older adult employees.