Food industry worker shortage? Nonsense
Labour market has been broken for years, says columnist
“We're hiring” signs are everywhere.
Some blame overly generous employment insurance programs for keeping highly capable individuals in their homes. Others point to the younger generation not willing to work or blame the virus itself because people are in fear of it.
Rumours of agism have also emerged to explain why we are seeing more boomers exiting the market altogether.
It is likely a mixture of several factors. Blaming one more than others is baseless. Regardless of the reason, the labour shortage in Canada has not only been here for a while, it is also happening around the industrialized world.
The food industry, of all sectors, is likely one of the most affected.
Let's start with the most obvious issue we see as consumers: the labour deficit in food service.
Restaurants are cutting hours, even closing several days a week just because they can't get anyone to serve, cook or clean. A survey this summer suggested restaurant operators are providing more incentives to new employees. A total of 40 per cent are offering extra paid vacation and 37 per cent hope to persuade new hires with better job titles, while more than a third are offering signing bonuses, sometimes over $1,000.
As wages rise, so are applicants. Some ice cream shops and independent restaurants have doubled wages in recent months, and many were flooded with applicants. With more money, candidates will show up. In the U.K., wages in food service have risen by almost 15 per cent in six months.
But with low margins and highly unpredictable demand patterns in food service, it's not that easy.
Many restaurant operators have next to no cushion to increase wages. To offset staffing woes, some are limiting operating hours.
Don't be surprised if restaurants become managed like the airline industry. Airlines only have flights if they can fill the aircraft. If not, they cancel it. More restaurants are likely to open only if most seats can be filled and will menu manage accordingly.
In other words, expect fewer choices. Some restaurants have started to offer only one or two choices of entrees. Given financial pressure points, competition and higher input costs, it is the only way for operators to run a profitable operation.
In food distribution, the situation is beyond comprehension. On farms and in processing, labour shortages are not just about convenience and profitability. It also means a lot of food goes to waste. Around 35.5 million tonnes of food goes to waste across Canada's supply chain each year, according to a recent Second Harvest report.
PRODUCE IN FIELDS
Short-staffed operations have seen mushrooms, lettuce and broccoli not make it to market because getting enough bodies in fields was not possible. Canadian food manufacturing had 28,000 vacancies before the pandemic. Some suspect that may have gone up by as much as 50 per cent since March 2020.
In retail, if you see an empty shelf, it's not because we're running out of food. It's likely because nobody was available to fill it, or the supplier may have run out of truckers.
Not only do governments need to find ways to incentivise young and old to participate in the economy, high schools, colleges and universities need to value the food industry and showcase it as a viable career path. The current situation is getting many employers to think differently about how to manage their business, but they need help.
The reality is that our labour situation is everyone's business. Canada has provided one of the most educated workforces in the agri-food sector in the world, from farm to fork. Many farmers, people in food processing and distribution have graduate degrees.
Wages and revenues have barely moved in tandem with the amount of knowledge gained, novel technologies used and skills acquired by the workforce in the industry. For the most part, while the food industry has long provided Canadians with highquality, safe food products we expect, it's always been about cheap calories for consumers. Quality food requires strong human capital.
We're not experiencing a labour shortage per se. It is very much a lingering broken labour market that has gotten worse because of the pandemic. All of it is galvanized by an economy filled with consumers looking for the best deals. If you're willing to pay $30 for your next club sandwich at a restaurant, an extra 10 per cent in tips or 5-10 per cent more at the grocery store, it means you're aware of what lies ahead.
Blaming food companies and restaurants is easy. Asking them to increase wages without paying more for their food and service is just not realistic anymore.