Ow. It is beginning to hurt here.
This is another article exerpted from the December 2006 issue of BC Business. More indication of a gutted city?
Could B.C.’s economy overheat?
Have you noticed the signs in windows lately? “Help wanted.” “Now hiring.” They are everywhere. And just a few years ago, there were no jobs...even highly qualified university grads were having to line up for jobs driving cabs or flipping burgers. In 2001, the government introduced the six-dollar-an-hour training wage, much to the horror of the labour movement. It was a move intended to encourage companies to hire students...but today the tables have turned. It’s employers who are desperate for workers, and not many can attract them by paying a measly six bucks an hour. In fact, the government is now contemplating dropping the training wage because it has become irrelevant. Who’d have thought an economy could be too hot? When you have an unemployment rate of about five per cent, it means nearly everyone who wants to work, or can work, is working.
Problem is, they are working for peanuts. Can housing costs hit the stratosphere without all else following? This carousel is broken. Note - I earlier made a comment about housing and fuel not being calculated in the CPI. That was erroneous. Thanks to VHB for pointing that out to me.
Come to Vancouver and buy a sickeningly over-priced home, just don't expect to be able to get a pizza, or a burger, or a coffee, because there is no one to serve you. The only solution that businesses have is to crank up prices - which will put them out of business.
People have been thrilled by their paper gains on RE, but that vision is myopic. People cannot afford to run businesses here, so what will our city become? A hollow shell, me thinks. A bunch of RE perched on the edge of the Pacific.
Nat Bastone, president of Nat’s New York Pizzeria, fears he’s going to lose his business because he can’t find staff. He hasn’t received a single application for a much-advertised job. Positions that used to be filled by word of mouth are getting no response. Nat’s hasn’t been a struggling business, anything but: his sales have increased every year since 1992. But his shop is in Kitsilano, and that’s expensive real estate. Young people can’t afford to live there, at least not on service-industry wages.
So what is so great about this booming economy? Young people are the back-bone, and the future of our society. I see a ghost town in the cards if something doesn't give. freako speaks of zero-sum games, but this is looking an awful lot like a negative-sum gain.
B.C. Federation of Labour president Jim Sinclair wants the minimum wage raised by two bucks. But are you willing to pay a lot more for pizza? I’m sure Tim Hortons could raise the wage it pays, and so could Starbucks or Blenz, but how much more do you want to pay for your latte or sandwich? The owners of the pizza shop work 14-hour days, six days a week and are worried sick that they can’t make it work. What are the answers? Higher minimum wages and the higher prices that come with them? Encouraging seniors to come back to work to help fill labour shortages?
Well, if a crack-shack on the East side is worth a half-million dollars, surely we can pony up ten bucks for a coffee. We can just crank up the rent on the basement suite to cover that. Then, they'll need to raise those wages even more, and a cuppa joe will be fifteen bucks. Hell, if the housing prices can increase ad infinitum, why not everything else? Growth is good - right?
I don’t know how many seniors feel like flipping burgers, but perhaps some might be bored or in need of some extra money to top up their pensions. We might have to encourage more unskilled immigration, too, but those immigrants are still going to face the challenge of living in Canada’s most expensive city.
Seniors will flock to Vancouver to fill those jobs, and to buy up Shaughnessy while they are at it. Bring the grandkids. They can only make so much working in the cheaper cities of Toronto, Montreal, etc. I'm sure that they will be pulled here by our higher wages. If that doesn't work, we can pull in unskilled immigrants. They will be glad to come here to McJobs. Hindus might have a bit of an issue with flipping burgers though.
I spoke with the premier recently, who told me one of his concerns is that we will have a million new jobs coming down the road in the next decade, but lack the population to fill them.
A million new jobs? Is the premier smoking Basi's weed? Or is he still drunk from one of his Hawaiian vacations? A million jobs on the way? I'm speechless at that mendacity. Mind you, I haven't been drinking the water.
The front end of the baby boom is now hitting 60, and as those people move through the next five years, most will be planning to retire. Already, we have a shortage of doctors, and nurses. That’s going to get worse over the next decade right when most of us will start needing far more medical care than we’ve ever needed before. University professors will be retiring in record numbers. Police and firefighters are aging and the next generation just doesn’t have the numbers necessary to replace them. Have you looked at the lineup of motorcycles on a B.C. ferry lately? Even the bikers have grey hair, if they have any left. It looks like even the Hells Angels are going to face a demographic problem.
But I'm sure all of those seniors won't need any services. Plus, they will be easily cowed into taking what they can get.
How can this keep going? It can't. The only logical outcome is a reversal of "fortune". That means a severe correction in RE prices.
My head hurts.