Governor Tiff Macklem discusses how the economy and jobs could be different after the COVID-19 pandemic and what we can do to ensure that everyone benefits as the labour market recovers.
The effects of COVID-19 have been deep and uneven
All Canadians are affected by COVID-19, but workers in some industries have fared much worse than others.
The biggest job losses have been in service industries where physical distancing is hardest, such as accommodation, food services, arts, entertainment and recreation. And the workers in those industries—mostly women and youth—tend to be low-income earners.
The second wave of the virus further hurt women and youth. Both groups have seen their share of the long-term unemployed—people out of work for at least 26 weeks—rise more quickly than others have.
As more people are vaccinated and normal life returns, the Canadian economy will strengthen. But a complete recovery in the labour market will take a long time.
A complete recovery is a shared recovery—shared by working women and men of all ages across Canada."
The post-pandemic economy will be different
Even though vaccines promise a lasting recovery, the economy won’t be the same as before COVID-19.
New technologies were already changing how we live and work, and the pandemic has sped up those changes:
- The rise of online shopping means fewer in-store retail workers may be needed in the future.
- Many Canadians who have been working remotely will likely keep doing so, which would reduce demand for office space, transportation and restaurants.
- Demand for workers with digital skills will likely keep rising. At the same time, some of the jobs lost in the pandemic won’t return, as more tasks are automated and industries are reshaped.
Technological change is usually good for workers and the economy in the long run. Giving people and businesses tools to be more productive eventually leads to more jobs and higher wages.
At first, though, the groups of workers hit hardest by COVID-19 may continue to struggle.
Some businesses and some jobs will not return either because of permanent changes in demand or the adoption of new technologies. So, we can expect a long adjustment process."
A shared recovery is good for everyone
The more the recovery is shared, the more we can limit damage to people’s careers and lifetime earnings from being out of work for long periods. Such damage can hold back the economy, making it harder for wages and living standards to rise for everyone.
So everyone has a stake in ensuring Canadians can adapt to change and share in the recovery:
- Workers should think about the digital skills and training they may need for future jobs.
- Schools should prepare children for a digital future, and colleges and universities should build digital skills into courses in every field.
- Businesses play a key role in digital-skills training. This could include pairing younger employees with older colleagues who may not be as familiar with new technologies.
- Governments could boost access to child care to help more women join the workforce. As well, programs that help match workers with employers will be increasingly important.
The Bank of Canada has an important role, too. By keeping borrowing costs low for businesses and households, we make it easier for companies to invest in both workers and technology.
Monetary policy can continue to support demand in order to minimize scarring and bring as many people into the work force as possible."