economy
BC’S WAGE GROWTH IS FAST VS RECENT YEARS, SLOW VERSUS CLOSEST PEERS BC’s wage growth has been much improved in recent months, outpacing inflation but not the nation
As with the narrative around other local labour market features, the telling of BC’s perpetually-unfolding wage story is nuanced and in need of context, both spatial and temporal. To start, let’s cut to the chase: British Columbia’s median weekly wage posted annual growth of 4.3% in October 2019. Now, is that a good thing or should it be a cause for concern? Regardless of your tendency to be a pessimist or optimist, there is evidence supporting the need for a balanced view. First, the pessimist’s perspective: while nominal (that is, unadjusted for inflation) wages appear on the surface to have grown at a decent clip over the past year here in BC at 4.3%, wages in Ontario grew by 5.8% and across Canada as a whole by 5.1% over the same period. As well, the most recent 4.3% year-over-year growth represents a slowdown in wage growth from 6.0% in July, 5.4% in August, and 6.1% in September. The direction of change in wage growth is entirely consistent with the changes we are
seeing on the labour force, employment, and unemployment rate fronts so to the extent that changes in these dimensions continue along their current path, wage growth may slow further in the coming months. In contrast, here’s what an optimist sees. At 4.3%, BC’s median weekly wage rate is growing at more than twice the annual average achieved in the half-decade from 2013 to 2018 (2.0% per year) and is considerably faster than BC's consumer price inflation (most recently sitting at 2.2%), meaning real, inflation-adjusted wages across the province are growing. That's a good thing. Additionally, while the latest wage growth rate represents a slowdown from the summer months, it is considerably higher than the middling changes experienced between July 2018 and June 2019, when nominal wages rose no faster than 2.1% and fell by as much as 1.7%. So take your pick on the narrative of your choice. To us, continued growth in wages (above inflation) is welcome news.
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