Canada’s Real Wage Growth Stagnant For Last 30 Years -Report

Average hourly wages increased by only three dollars from 1981 to 2011 after adjusting for inflation

A report published last month as part of Statistics Canada’s Economic Insights series finds that average real wage rates increased by only 14 percent in Canada from 1981 to 2011.

According to the report, real hourly wages, meaning hourly wages after adjusting for inflation, increased from approximately $20.70 in 1981, to $23.70 in 2011, a $3 wage gain in 30 years. Median real hourly wage growth was even more meager, increasing by approximately $2, to $20.90, between 1981 and 2011 -a 10.6 percent increase over three decades.

Different rates of wage growth were observed in the earlier and latter halves of the last 30 years, with average real hourly wages rising by only 4 percent in the 17 year period from 1981 to 1998.

After deep spending cuts by the federal government in the mid-1990s, which brought total government spending levels down from 53 percent of GDP in 1992, to 43 percent of GDP in 1998, the rate accelerated, with wages increasing 10 percent in the 13 year period from 1998 to 2011.

Much of the developed world has experienced wage stagnation over the last four decades. Explanations for the slow down include:

  • the break-down of the Bretton-Woods system, which pegged the world’s currencies to gold, in 1971, and the subsequent increase in monetary inflation, resulting in nominal wage hikes not keeping up with inflation
  • globalization and corporate outsourcing to low wage countries
  • an ‘innovation saturation’ as economies mature
  • the entrance of women into the work force increasing the supply of labour
  • an increase in government spending levels diverting economic output from private sector investments

Nominal wages in Canada increased by 1.1 percent in 2011, substantially less than last year’s annual inflation rate of 3.2 percent.

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3 Responses to Canada’s Real Wage Growth Stagnant For Last 30 Years -Report

  1. kumar says:

    I am handling the marketing and sales for Telecom VAS company for India and S.W. Asia .. I understand that there are opportunities for programmers, business analyst at Canada but is there any scope to get opportunities into sales, marketing , consulting there. If yes what could be the route to those opportunities. Thanks in advance

    Cheers
    Kumar

    • CICS Immigration editor says:

      Hi Kumar, yes there are definitely opportunities, which are dependent on the specific details of your experience and credentials, but how much opportunity is a question better answered by a labour market specialist, like a Canadian-based recruiter. Our opinion on labour market issues is not informed enough to be relied upon professionally.

  2. Pingback: Reflections on Finance and the Incentive to Budget, Part 1 | CrimsonHalo.com

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