A question regarding inflation-adjusted Canadian wages came up on Twitter yesterday. So, let’s crunch some numbers.
Average Hourly Wage Chart Notes
- From July 2007 through November of 2023 nominal wages rose from $17.43 to $34.28. That’s a 96.7 percent rise.
- From July 2007 through November of 2023 real wages rose from $17.27 to $21.59. That’s a 25.0 percent rise but most of it came between 2002 and 2009.
- From February 2009 through August 2018 real wages rose from $20.06 to $20.31. That’s a rise of about 2.8 cents a year.
- From the start of the pandemic in March of 2020 until November of 2023 nominal wages rose from $29.88 to $34.28. That’s a 14.7 percent rise.
- From the start of the pandemic in March of 2020 until November of 2023 (dashed arrow) real wages fell from $21.87 to $21.59. That’s a decline of 1.3 percent.
- Backing up slightly to January of 2020, real wages rose a total of 2.1 percent over 3 years 10 months, a bit over 1/2 percent per year, again all of it was early.
- From January 2021 until November of 2023 (solid arrow) real wages fell from $22.25 to $21.59. That’s a decline of 3.0 percent.
You can pick starting points to bend things positive or negative but the overall chart speaks for itself.
Average Hourly Wage Change Detail
Detail Calculation Notes
- I used average wages, computed year-over-year changes, and subtracted the year-over-year change in the CPI Index.
- Real wages declined for 23 straight months from march of 2021 through January of 2023.
Canada Avg Hourly Wage Change Real and Nominal
July 2002 through December 2019 Year-Over-Year Averages
- CPI: 1.87 Percent (The Fed is Very Envious)
- Nominal Wage Growth: 2.81 Percent
- Real Wage Growth: 0.94 Percent (The big growth came 2002-2009)
Note the huge covid-related spikes of 10.46 percent nominal and 10.69 percent real. This happens because the lowest paid workers are the first to go in recessions while prices drop.
I created the above charts in response to a similar US chart I posted. Someone asked for a Canadian comparison.
Trudeau in Dire Need of a Better Story
CBC reports Trudeau goes into 2024 in dire need of a better story to tell.
Inflation has cooled considerably from its high point in 2022, but it is still higher than most Canadians are used to and the impact of that peak still lingers.
In 2014, a year before Trudeau came to office, Pollara found that 45 per cent of Canadians were optimistic about the future of the middle class. Two years ago, in the midst of the pandemic, that figure was at 53 per cent.
But when Pollara (whose chief strategy officer is Dan Arnold, Trudeau’s former pollster) asked the question again this November, just 31 per cent said they were optimistic.
Why Biden’s Approval Rating Is Miserable in One Economic Chart
Income is rising and so are wages. Even real income is up. But real wages are another matter.
For discussion, please see Why Biden’s Approval Rating Is Miserable in One Economic Chart
Note: Personal income includes Social Security and other government benefits, dividends and interest, business ownership, and rental income. Also some people are working multiple jobs.
See above link for more details and charts.
Interesting country comparison showing two things: (1) Real wage trends in Canada and the US were very similar: US real wages since 2020.M1 increased by 1.8 percent, and Canadian real wages increased by 2.1 percent. (2) Real wages in Canada have increased much faster than in the US. Using annual real wages, real wages in Canada were 19.7 percent higher than in 2002; US real wages during the same time period increased by 8.0 percent. Last time I checked, Canada had more immigration than the US, Canada was more open to trade than the US, and Canadian regulations are as tight (if not tighter) than in the US. So, where is the difference in long-term real wage trends in the two countries coming from?
Maybe Canadians are smarter and happier than Americans? And focused on improving their lives rather than who to blame for their personal situation.
Based on many of the commenters here, there are way too many Americans who instead of working to improve their lives, just sit on their butts and complain on blogs all day, often spewing misinformation and cult conspiracy nonsense. Eh?
Canadians as a people are not much different from ‘Americans’. The difference is a wider, top-down culture of corrupted power – military, political, policing – resulting from its more-freewheeling system and huge markets.
This wage growth comparison is just part of a cycle and will turn back.
Another interesting comparison is Australian to Canadian; Canadians rely on their powerful neighbor, the Aussies made it more on there own.
“ the Aussies made it more on there own.”
Nope.
Both countries are trading nations. Both trade heavily with countries in close proximity to them. Canada with the US. Australia with nearby Asian countries; particularly China.
You could switch populations between Canada and Australia, and the results would be the same. You would only get different results if for some reason one country decided to stop trading.
Looks like The People’s Republic of Canada’s proles are taking a -30% pay cut.
Counterfeiting never produces wealth. It always steals from the average Joe. No surprise here.
In recession real wages might be up, but workers will get only 70%/80% of their
salaries.
…and then get laid off anyway, after being unable build up any backup savings…
You can always save money because necessity is a subjective concept.