Disaggregating wage growth: Trends and considerations

Release date: August 8, 2022

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Year-over-year wage changes don’t tell the whole story

On a year-over-year basis, recent increases in the Consumer Price Index (CPI) have been faster than the increase in average hourly wages …

Chart 1

Data table for chart 1 
Data table for chart 1
Table summary
This table displays the results of Data table for chart 1 CPI and Average hourly wages, calculated using percent units of measure (appearing as column headers).
CPI Average hourly wages
percent
2021
October 4.7 2.0
November 4.7 2.7
December 4.8 2.7
2022
January 5.1 2.4
February 5.7 3.1
March 6.7 3.4
April 6.8 3.3

… partially eroding longer-term wage gains workers have seen since the strong labour market conditions immediately prior to the pandemic.

Chart 2

Data table for chart 2 
Data table for chart 2
Table summary
This table displays the results of Data table for chart 2 CPI and Average hourly wages, calculated using % change units of measure (appearing as column headers).
CPI Average hourly wages
% change
April 2019 to April 2022 10.1 12.5

COVID-19 contributed to a shift in employment towards higher-wage industries

  • Overall wage changes observed since 2019 are influenced by shifts in the relative composition of employment, from lower-wage to higher-wage industries.
  • Most of the highest-wage industries have seen strong employment growth over the past three years, while employment has decreased in most of the lowest-wage industries.
  • This compositional shift alone puts upward pressure on the average wage, regardless of any changes in individual pay.

Chart 3

Data table for chart 3 
Data table for chart 3
Table summary
This table displays the results of Data table for chart 3 Percent (appearing as column headers).
Percent
Industries with the highest average wage in April 2022
Utilities 2.0
Natural resources -1.6
Public administration 11.0
Professional, scientific and technical services 16.8
Finance, insurance and real estate 12.0
Industries with the lowest average wage in April 2022
Other services -12.9
Business, building and other support services -10.6
Wholesale and retail trade 4.2
Agriculture -16.9
Accommodation and food services -13.7

Interpreting wage growth requires a range of indicators

  • Understanding the dynamics of wage changes—and their relationship to rising consumer prices—requires a range of indicators above and beyond average hourly wages from the Labour Force Survey (LFS).
  • From March 2019 to March 2022, recently-hired employees saw wage gains which were greater than both CPI and the average for all employees, in part a reflection of some job-changers having above-average work experience and earning power.
  • On the other hand, the offered wages associated with vacant positions grew more slowly than CPI, suggesting limits in the ability of some employers to raise pay levels.
  • Average weekly earnings, which capture the effects of changes in both wages and the number of hours worked per week, grew slightly faster than average hourly wages from March 2019 to March 2022.

Chart 4

Data table for chart 4 
Data table for chart 4
Table summary
This table displays the results of Data table for chart 4 Percent (appearing as column headers).
Percent
Consumer Price Index 10.0
Average hourly wages - all employees (LFS) 12.4
Average hourly wages - employees hired in the previous 3 months (LFS) 16.5
Average offered wage - job vacancies (JVWS) 5.3
Average weekly earnings - all employees (SEPH) 15.2

Differences in wage dynamics across industries shed additional light on labour market conditions

  • In the accommodation and food services industry, growth in average hourly wages from March 2019 to March 2022 lagged behind CPI growth. Over the same period, for this industry, both the wages of recently-hired workers and the offered wages of job vacancies matched inflation, pointing to pressures on employers to raise wages in response to labour shortages.
  • In professional, scientific and technical services, growth in average wages, offered wages and weekly earnings each exceeded inflation over the period from March 2019 to March 2022. Wages of recently-hired employees lagged behind, suggesting compositional differences between new hires and the overall industry workforce over the period.

Chart 5

Data table for chart 5 
Data table for chart 5
Table summary
This table displays the results of Data table for chart 5 Professional, scientific and technical services, Accommodation and food services and Consumer Price Index (CPI), calculated using percent units of measure (appearing as column headers).
Professional, scientific and technical services Accommodation and food services Consumer Price Index (CPI)
percent
Average hourly wages - all employees (LFS) 12.0 8.7 10.0
Average hourly wages - employees hired in the previous 3 months (LFS) 7.7 9.9 10.0
Average offered wage - job vacancies (JVWS) 13.6 9.5 10.0
Average weekly earnings - all employees (SEPH) 14.3 12.2 10.0

For further information or to provide feedback, please contact:

statcan.labour-travail.statcan@statcan.gc.ca

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