Wage Gains Falling Behind Inflation
Dec 02, 2011
A recent study by Statistics Canada shows that Canadian workers are failing to keep up with the rising cost of living as real wages continue to fall dramatically.
Average weekly earning gains have been dropping steadily since the spring, when they were above the inflation rate. For this past September, wages fell 0.3 percent. When the 3.2 percent inflation rate for the month is taken into consideration, the drop in real wages becomes more dramatic.
With income from investments also soft because of the volatility in equity markets, analysts are suggesting that it is fair to assume that Canadians’ average standard of living is also dropping. The threat of weakening economic conditions, particularly fears of a second global recession, could also be depressing wages.
This downward trend in wages happens to coincide with weak job growth over the last four months. Some analysts suggest that many of the jobs recovered since the recession have been of the low-paying variety. In the words of CIBC economist Benjamin Tal, “There’s clearly a movement from high-paying professionals, public sector and construction jobs to low-paying service and retail. Even within manufacturing, there’s a movement from high-paying manufacturing jobs to lower-paying.”
Aside from how weak income growth affects individual Canadians, the trend is a worrying signal for the economy overall. Consumers represent a major component of the Canadian economy and any slowdown in spending will depress growth.
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So why in contract negotiations do we settle for less than inflation time after time?? We already have the Manitoba government declaring that , once again, they expect future contract salaries to continue to stay at 0%, while management continues to mismanage or at least not be accountable. Bad faith bargaining Ialready in MHO
Colleen W. - 2011-12-04 22:39