Quebec’s salary lag behind Ontario is not what we believe, its causes not as simple as they appear, and its solutions not those that the Legault government is proposing, a study concludes.
More than a quarter of the pay gap between full-time employees in the private sectors of the two economies is due to the choice of Quebecers to have work weeks a little shorter than those of Ontarians, reports the Institut du Québec (IdQ) in a study on the issue unveiled Thursday. For the rest, the best way to reduce this delay is not to concentrate efforts on increasing the number of top-paying jobs, but to seek to increase the productivity and incomes of all workers.
Premier François Legault has promised to reduce the wage gap between Quebec and Ontario. This delay would be 11.8% for full-time employees in the public sector, notes the IdQ report. But since he is talking about raising an average annual salary of $ 56,000 in Quebec, it must be deduced that he is thinking more of workers in the private sector, where Quebec lagged behind by 8.8% in 2019.
Since more than a quarter of this delay (28%) is due to the fact that in the full-time system, Quebec employees work on average more than an hour less per week – apparently by choice – than Ontario employees (38, 7 hours against 39.6 hours), we should rather speak of a difference of 6.8%. If the relative weight of each industry were the same in Quebec as in Ontario, we would fall to 5.8%, continues the IdQ.
As this study is more concerned with comparing the economic performance of Quebec and its neighboring province than the level of well-being of their respective workers, the higher cost of living in Ontario was not taken into account. account in all these calculations, explained to the To have to the authors of the study. But if that had been done, the gap between hourly wages would have narrowed by 4 percentage points, they estimate.
Nuances and complexity
“All this shows the importance of not stopping at large averages and digging a little into the figures to see nuances appear and understand that reality is diverse, and that certain differences can be the result of choices”, a explained in a telephone interview with the CEO of IdQ, Mia Homsy.
Excluding the differences in the cost of living, a little less than two-thirds of the delay in full-time wages in Quebec is due to hourly wages of 2% (manufacturing of durable goods), 8% (professional services , scientific and technical), 12% (retail) and even 19% (public administration) higher in Ontario. The rare sectors where Quebecers have the advantage, such as construction (+ 3%) and educational services (+ 8%), are not numerous enough to compensate.
The delay also seems to be due to the size of the companies. The larger ones pay higher average hourly wages ($ 29.64) than the smaller ones ($ 22.09). We note that they represent a greater proportion of jobs in the private sector in Ontario (45.9%) than in Quebec (38.7%).
Taking note of the Legault government’s desire to increase the number of “paid jobs” in Quebec, the experts at the IdQ are worried that it attaches so much importance to this average of $ 56,000 per year that it he sometimes suggests that his help will be reserved for companies that can offer more.
They recall in particular that such an attitude would exclude nearly two-thirds of full-time workers in the private sector and even more than 80% in certain sectors such as the retail trade and the agri-food sector. They point out that many well-paying jobs depend on the existence of other lower-paying jobs, often in the same company. They argue that the government’s approach would favor large companies while the objective should rather be to help SMEs reduce their backlog.
“The finality is good, but by wanting to be too mechanical in its approach, the government runs the significant danger of making a lot of losers,” warns Mia Homsy.
It would be wiser to try to raise everyone’s salaries, says the IdQ. And the best long-term way is to stimulate innovation and productivity while promoting workforce training, capital investment and energy transition.