A new report says a protracted labour shortage in Canada could fuel more rapid wage growth and inflation over time.
Yet long-run structural labour shortages could continue to push wages higher over time, potentially contributing to inflation.
“With a dearth of available workers, prospective employees will have more muscle at the bargaining table, which will in turn fuel more rapid wage growth.”Article contentThere are roughly 50 per cent more job openings now compared with before the pandemic, while the pool of unemployed workers is 11 per cent smaller, the report said.It’s a scenario the bank warns could “at best slow the pace at which inflation eases and at worst, reignite it.
However, the worker shortage could be offset by capital spending on productivity-enhancing investments like automation.
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