Thu 24 Aug 2006
Alberta Canada is one of the hottest markets in North America right now. The province is rich in oil and has a massive oils ands reserve that's barely tapped. Many companies have their Canadian headquarters there, the province is VERY wealthy, and it is experiencing an unprecedented and extended economic boom.
To me, it's an interesting study in localized inflation. I've been talking to a few friends who work for international companies with branches in Alberta. They all talk with frustration about the difficulty of finding workers who will stay at the job. One company, whose employee wages are mandated from a US based head office, are finding that the wages are adequate anywhere else in Canada and the US but are less than half of what is expected by workers in Alberta! It's no wonder that the company had a turnover last month that was 400% what it is in the area where he worked!
Companies are struggling to keep employees in Alberta because the wages are so high that they can't afford to pay them. And employees who willingly accept lower wages (for various reasons including future opportunities or ownership opportunities, etc.) are unable to afford to live there.
I'm not sure what the solution is. I normally prefer less government intervention in business but this situation really concerns me because it could set up local businesses that aren't in the wealthy oil industry for failure. At the same time, are there opportunities for business owners like us who can find a solution? I'm going to keep my eye on Alberta. There's money there.