The only bright spot in the Canadian economy is the higher value-added manufacturing sector, says Drummond. With a strong niche positiion, you may not have to worry about competing with southern U.S. manufacturers that pay $16 an hour. "If you don't have the niche," he says, "you're going to see wage decompression."
BUT - there will still be some shortages of skilled labour, though not as dire as some have predicted. Demand and supply will adjust, says Drummond, but it will take time and money. Some wages will rise, and some production will be shifted to other markets.
Times have not been kind to labour, says Drummond. Newcomers to the workforce now earn 25% less (in real terms) than young people entering the workforce in 1980.