It’s hard to believe, our intuition, surveys and those close to us tell us otherwise. However, when we look at the official figures, wages have grown faster than inflation in recent years. Yes, our purchasing power is higher than it was… before the pandemic.
In Quebec, someone who earned $1,000 per week in February 2020, just before the start of health measures, now receives $1,182 for their services. A jump of 18.2%.
During the same period, the consumer price index increased by “only” 15.7%.
Obviously, this is an average. This means that there are losers and winners. But our collective financial situation has improved despite robust inflation. I know, it’s hard to believe, especially since the winners in question rarely testify about their reality in the news.
Like me, I imagine that you are perplexed and that you would like to know who could have benefited from salary increases significantly higher than inflation… apart from the MPs who sit in Quebec. I will come back to it.
It must also be said that 2020 was already a bit far away. The choice of this reference period for making comparisons could create a distortion in the results.
Could it be that the year 2023 will be different from the previous two? After all, there has never been so much talk about financial stress, debt, and changes in spending habits. I asked the question to Patrice Gauthier, director of labor and remuneration statistics at the Institute of Statistics of Quebec (ISQ).
Conclusion of his analysis: the weekly wage and the consumer price index have both increased since January by 4.7%. The curves are identical! This is therefore the status quo in terms of collective purchasing power.
In addition, these analyzes do not take into account other factors that have had a positive impact on Quebecers’ bank accounts. Let’s think about the two checks paid by the Legault government, the support for low-income people aged 70 and over and the reduction in the tax rate in effect since 1er July.
I’m going to end up believing the ad that said, “You’re richer than you think.” »
This gap between the figures and our perception of reality is quite fascinating. I discussed it with the economist and professor emeritus of economic sciences at UQAM, Pierre Fortin, who signed a text in News recently on our purchasing power.
“Instinctively, I, like others, have the reflex to look at only one aspect of things,” he told me, whereas we should always ask ourselves if there is “something else happening at the same time that could change the perspective.
Our attention is currently focused on price increases at the grocery store. When we see that the price of butter has jumped by $2, we forget that our salaries have (probably) increased too. And maybe faster than the price of butter.
“We tell ourselves that our salary increase was deserved, but that the price increase is stealing it from us,” summarizes Professor Fortin.
Human beings are so made that they always give more importance to bad news than to good news. The indexation of pensions paid by Ottawa and Quebec, for example, often goes unnoticed. How many retirees wrongly believe that their income has not changed for years?
Surely not everyone whose mortgage payments have doubled can take solace in looking at their pay stub. And many households are now struggling to make ends meet. This reality exists. But it is wrong to believe that “Quebecers” are getting more out of it financially because of inflation. Moreover, the travel industry is not yet short of customers.
Let’s return to salaries, just to satisfy our curiosity.
Surprisingly, the data shows that only 4 sectors of activity out of 18 have shown increases in hourly wages (between 16% and 23%) above inflation since the start of the pandemic. These include accountants, architects, janitors, engineers, store clerks, security guards, film industry technicians, among others.
So how come the average is so high? The number of jobs in the highest-paying sectors has jumped, while Quebecers have abandoned low-paying jobs in accommodation and restaurants. In just three years, the number of professionals offering scientific and technical services has jumped 23% and in the construction sector, the increase is 15%, for example.
In other words, the overall picture of employment has changed, to the benefit of workers and our collective purchasing power.
Good financial news being rather rare these days, here is one to remember, if only to keep morale up.