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Labour pains: Rising costs and growing shortages
By Chris Elliott
October 31, 2011
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Average weekly earnings in Canada’s restaurant industry continued its upward trajectory, rising 2.1 per cent in the first seven months of 2011. This modest increase comes on the heels of several years of strong gains. Since 2005, average weekly earnings for restaurant employees jumped by 30 per cent compared to a 19 per cent increase in the industrial average. During this time, average weekly earnings in the restaurant industry have also outpaced commercial foodservice sales (+23 per cent).
Increasing wage costs
Most wage growth over the past six years is from Alberta, Newfoundland and Ontario. Eight provinces announced minimum wage increases for this year, some of which are not accounted for in 2011’s growth rate as they have not yet taken effect. As a result, 67% of operators note rising labour costs are having a negative impact on their business in CRFA’s Restaurant Outlook Survey.
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Expanding labour shortages
While wages are climbing, an increasing number of operators are struggling to find skilled labour. CRFA’s Restaurant Outlook Survey found that 30 per cent of respondents had trouble recruiting skilled workers in the third quarter of 2011, up from 25 per cent in Q2. This is not surprising as accommodation and foodservice created 31,000 net jobs in September, representing half of the total 61,000 created for the month. So far this year, the accommodation and foodservice industry has created 73,000 jobs, accounting for more than one in four new jobs in Canada – 28 per cent to be precise.
As demand for workers grows, the labour shortage will steadily worsen. By 2025, the restaurant industry will be short 172,000 jobs.
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Note: Average weekly earnings are derived by dividing total weekly earnings by the number of employees.
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