economy
EVERYBODY’S WORKING FOR THE WEAKENED (WAGES) After accounting for inflation, wages are once again on the rise, having lost ground for the better part of the past 2 years.
Average weekly earnings are a useful, though imperfect, measure of how wages are changing over time. All measures of wages can be a tricky thing as they depend on the earnings of those who are working at a given time. So as employment, and unemployment, changes, that can impact average earnings even if an individual's wages remain unchanged. To wit, in 2020 average wages, both nominal and real, were rapidly increasing even though employers weren’t necessarily paying more. This was due mainly to lower- wage workers losing their jobs during lockdowns, thereby increasing the average through subtraction. Similarly, the decline in wages, resulting in negative real wage growth that was observed in early 2021 was due, in large part, to sizable gains in employment, particularly in lower-wage employment. This meant that the average was decreasing, even though individual’s incomes weren’t.
Since then, however, employment has been steadier and nominal weekly earnings have seen robust growth. Real weekly earnings, on the other hand, have been negative during that time period, as inflation has outpaced average earnings growth. This has resulted in a loss of purchasing power for the average person as costs have been rising faster than paychecks. With inflation easing so far in 2023 (discussed in greater detail later on), real wage growth has been increasing both nationally and here in British Columbia, and tipped back into positive territory in each of the past two months. Canadians, on average, have a long way to go to recoup the purchasing power they enjoyed in 2020 but they are once again seeing gains in their incomes, even relative to inflation.
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