Average wages in Canada jumped higher during the pandemic, almost entirely because job losses were heavily concentrated at the low end of the earnings scale. When workers started to emerge from lockdowns, and inflation began to surge higher in 2021, wage growth lagged, cutting into household purchasing power. There are multiple different, and sometimes conflicting, estimates of average hourly earnings in Canada, and wage growth recently has been substantially stronger. But "real" (after adjusted for inflation) wages declined by about 1% in 2021 and 2.5% in 2022 before picking up in 2023.
Over the full cycle from pre-pandemic (2019) levels to now, estimates for average real wage growth per year range from an optimistic end of about 1%—not significantly different than typical pre-pandemic growth rates—to real wages running still slightly below pre-pandemic levels on the pessimistic side.
That real wage growth looks more modest when measured against the exceptionally tight labour markets early in the pandemic recovery when hiring demand was substantially outpacing the supply of unemployed workers and workers were in a historically strong bargaining position in wage negotiations.
Chosen excerpts by Job Market Monitor. Read the whole story @ RBC Royal Bank
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