The increase in the average hourly wage is still not keeping up with the frantic pace of inflation. Nevertheless, more and more workers are moving towards better paid jobs.
Statistics Canada employment data released Friday showed average hourly earnings in April rose 3.3 per cent, or 99 cents (to $31.06), year-on-year, representing similar growth to that of 3.4% (or $1.03) observed between March 2021 and 2022. segment of 15-24 year olds. It reaches $33.04 for men, 14% more than that of women, which is $29.03.
This digression being made, while these increases stick to the average annual increase of 3.4% experienced by the consumer price index (CPI) in 2021, they are however lagging behind the surge inflation fever that was observed at the end of 2021 and accelerated in the first quarter of 2022. In March, the CPI increase reached 6.7% year-on-year, an increase of one percentage point compared to the growth rate of 5.7% recorded in February. This is the largest increase since the 6.9% increase in January 1991, the year the goods and services tax was introduced.
Repositioning of workers
This wage gap, however, masks a phenomenon: that of the repositioning of the labor force which favors better paid jobs and which the pandemic has accelerated with, in the background, a remodulation of the balance of power in negotiation induced by the shortage of labor. -work. Statistics Canada notes that at the start of the pandemic, there was a sudden change in the distribution of employment by salary level. Recent results from its Labor Force Survey indicate that this shift in wage distribution has persisted.
In April, the number of employees earning an hourly wage of less than $20 decreased by 1.3 million, or 23.4%, compared to April 2019. This group of workers represented 25.9% of all employees , down from the 35.5% rate reported three years earlier. “The most recent results of the Job Vacancy and Earnings Survey suggest that this three-year decline […] is the result of a decline in supply—fewer workers available and willing to earn lower wages—rather than a decline in demand. This survey indicates that the number of job vacancies in occupations where the average hourly wage is less than $20 was up 166,000, or 61.4%, from the first quarter of 2019.
Conversely, the number of employees earning $40 or more per hour increased by 1.2 million, or 42.7%, over the same period. This group represented 24.5% of employees, compared to 18% three years earlier.
April’s employment statistics also indicate that the labor market has tightened further in recent months. “In addition to the increases observed in full-time work, one aspect of this tightening is the decline in the proportion of part-time workers who indicate that they would prefer to work full-time. The involuntary part-time work rate fell to 15.7% in April 2022, which is the lowest level on record. The part-time work rate was high for the first 18 months of the pandemic and peaked at 26.5% in August 2020 as many workers struggled to find full-time jobs, reads -on in The Dailyfrom Statistics Canada.
Solutions
Statistics Canada has mentioned certain possible solutions to this tense climate on the labor market. Job vacancies in the accommodation services, food service and retail sectors, which typically employ a high proportion of young people, accounted for 23.6% of all job vacancies in February. “In this context, young people could represent a source of labor that could help reduce the current tension in the labor market,” suggests the federal agency.
In addition, the 2021 Census is a reminder that Canada is facing a record number of retirements. It is measured that the stratum of 55-64 year olds represents 21.8% of the population of working age. April statistics show that labor market activity remained stable at 31.6% for women and 43.5% for men in the 55 and over age group. “The activity rate of this age group can be a key factor in balancing labor supply and demand”, it is highlighted.
There is also the problem of long-term unemployment, which represents 20.6% of total unemployment in April, and remains high compared to the proportion of 15.6% observed in February 2020, before the pandemic. “A total of 224,000 people had been continuously looking for work or on temporary layoff for 27 weeks or more in April 2022. […] Of these, 66.3% or 149,000 had been unemployed for a year or more. Among these long-term unemployed, 27.6% had a bachelor’s degree or higher, compared to 20.7% for those unemployed for less than 27 weeks.