Covid-19 Pandemic & the Job Market: What We Need to Learn

There is no doubt that the Covid-19 pandemic has had one of the most significant impacts on the world since World War II. It may sound hyperbolic, but even today, the global economy is still reeling from its effects (not to mention that several large economies haven’t fully recovered). Furthermore, multiple lockdowns in the developed world drove more and more people to work from home as businesses and economies struggled to stay afloat. In turn, this has profoundly affected the job market and workers’ attitudes. This article will examine how Covid-19 affected the jobs market and what lessons we all need to take into account in order to avoid further disruptions.

How Has Covid-19 Disrupted The Job Market?

The pandemic has caused the worst job crisis since the Great Depression and the 2008 financial crisis. Poverty and inequalities will likely increase due to the crisis, which will have long-lasting effects. While many developed nations were able to keep their economies afloat, a profound shift toward home working also occurred. This survey from income protection analysis discusses the importance of comparing income protection insurance to help alleviate some of the stress that can arise suddenly and without warning. Essentially, income protection remains one of the most financially sound moves you can make regardless of whether you work from home or not. Nonetheless, regarding the move toward working from home, you can see from the image below that Australia, Canada, and the USA have all seen a rise in the number of people dedicating space in their homes to work. However, Canada stands out regarding how many people have switched to working from home.

What Sets Canada Apart From Other Countries?

According to some reports, Canada reached record low unemployment rates in May at 4.9% (although it has subsequently risen to around 5.4%). Compared with other industrialized nations, the unemployment rate was (and remains) relatively low and has seemingly leveled out. This could be the result of several factors, including:

  • A strengthening labor market
  • Canada’s suitability for working from home
  • Wage growth

In order to shine more light on the reasons for Canada’s low unemployment rates, let’s discuss each of these points in more detail.

Strengthening Labor Market

Since Canada began to remove most of its Covid-19 policies, the labor market has been booming. While the war in Ukraine, inflation pressures, and significant central bank interest rate hikes have held back a lot of potential growth, the fact remains that the country has taken several palpable steps to grow its economy. For instance, they have recently announced they are fully reopening the border with the USA in order to stimulate economic growth. Furthermore, employees from several essential industries, such as manufacturing and natural resource extraction, were allowed to continue work. This allowed the Canadian economy to stabilize and remain productive throughout the pandemic. Nevertheless, Covid-19 changed how Canadians work, where they work, and what industries they work in.

Canadians Have Embraced Working From Home

At first glance, you might think the geographical size of Canada contributes to the boom in working from home. However, other equally sized nations haven’t embraced it to the same extent, nor have smaller but more densely populated countries. So why have Canadians embraced the home working phenomena so eagerly? According to official statistics, around 40% of jobs can be done from home. Moreover, over 60% of managers in the OECD reported that working from home increased worker productivity, which may explain its popularity. It also seems reasonable to assume that home-based employment has an effect on workers’ perceptions of their job security. Additionally, home-based jobs also tend to be somewhat resistant to the automation revolution that is rapidly approaching.

Wage Gains

Although many ‘contact-based’ jobs have been adversely affected by the pandemic (such as hospitality), other ‘low-contact’ types of jobs have prospered. It just so happens that the kind of employment that benefits from working from home are also those that pay higher wages. These include:

  • Finance
  • Educational services
  • Online-based retail
  • Professional services (legal, accounting, logistics, etc.)

There are many of these jobs with high wages and structured advancement opportunities. As a result, those seeking increased job security, higher salaries, and greater job satisfaction tend to pile on, making working from home seem even more appealing.

The Covid-19 pandemic has affected the world in ways unseen since previous worldwide events. Nevertheless, developing nations like Canada are better equipped to deal with the fallout by enabling their citizens to work from home.

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