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Don’t blame the food industry labour shortage on COVID-19 alone

Sylvain Charlebois
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We need more economic participation and educators need to value the food industry as a viable career path.

“We’re hiring” signs are everywhere, particularly in the food industry.

Some people blame overly-generous employment insurance programs that keep many highly capable individuals in their homes. Others point to a younger generation not willing to work, or they blame a fear of COVID-19.

Rumours of ageism have also emerged to explain why we’re seeing more baby boomers exiting the job market altogether.

In fact, it’s likely a mixture of several factors. Blaming one more than others is baseless.

Regardless of the reason, the labour shortage we see in Canada has not only been there for a while, but it’s also happening elsewhere in the industrialized world. And the food industry is one of the most affected sectors.

Let’s start with the most obvious issue we see as consumers almost every day: 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. Forty per cent are offering extra paid vacation, 37 per cent hope to recruit 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. Candidates will show up for more money. In the United Kingdom, 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, many are making other choices, like limiting their operating hours. Some are closing Mondays, Tuesdays and Wednesdays, or opening fewer hours during the day.

Don’t be surprised if a greater number of restaurants are managed like airline flights. Airlines only fly if they can fill the aircraft. If not, they’ll cancel the flight. More restaurants are likely to open only if most seats can be filled.

Restaurants will also manage their menus differently, offering fewer choices. Some have started offering just one or two entrees. Given financial pressure points, competition and higher input costs, it’s the only way to run a profitable operation.

In food distribution, the situation is beyond comprehension. On farms and in the processing industry, labour shortages aren’t just about convenience and profitability.

Labour shortages also mean that a lot of food goes to waste. According to a recent Second Harvest report, around 35.5 million tonnes of food goes to waste across Canada’s supply chain each year.

Produce like mushrooms, lettuce and broccoli haven’t made it to the food chain, just because getting enough bodies out in fields wasn’t possible. The Canadian food manufacturing sector had 28,000 vacancies before the pandemic. Some suspect that number may have gone up by as much as 50 per cent since March 2020.

If you see an empty shelf in a food store, it’s not because we’re running out of food. It’s likely because nobody was available to fill the shelf. Or the supplier may have run out of truckers.

Governments need to find ways to get people, young and old, to participate more in the economy. And educational institutions like high schools, colleges and universities need to value the food industry and showcase it as a viable career path.

The situation certainly has many employers thinking 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 global agri-food sector, from farm to fork. Many farmers and people in food processing and distribution now have graduate degrees.

Wages and revenues have barely moved in tandem with the amount of knowledge gain, 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 the high-quality, safe products, we all reasonably expect, it’s always been about cheap calories for consumers. High-quality food products require strong human capital.

We’re not really experiencing a labour shortage. It’s very much a lingering broken labour market that has become worse because of the pandemic. All of it is galvanized by an economy filled with consumers looking for the best deals, by choice, necessity or both.

If you’re already willing to pay $30 for that next club sandwich at a restaurant, or pay an extra 10 per cent in tips, or even an extra five to 10 per cent for food at the grocery store, it means you’re very much aware of what lies ahead.

Blaming food companies and restaurants is easy. But asking them to increase staff wages without accepting higher prices for food and service just isn’t realistic.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

© Troy Media

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