Bank of Canada offers explanations for country’s disappointing wages
Posted January 31, 2019 12:42 pm.
This article is more than 5 years old.
OTTAWA — A senior Bank of Canada official is using a speech today to explain the country’s disappointing stretch of wage gains even though it has been experiencing one of its biggest labour shortages in years.
Senior deputy governor Carolyn Wilkins says a stretch of weaker wage growth in energy-producing provinces since the 2014 oil-price slump has dragged down national numbers.
But she says even after accounting for these factors, wages have fallen short of where they should be in a tightened job market that has seen Canada’s unemployment rate drop to a 43-year low.
Wilkins says wages are also likely lower than expected as employers struggle to find candidates with the right skills, cautious employees decline to trade up for higher-paying positions elsewhere and people are reluctant to move to a new city to land a new gig.
She says structural factors may also be weighing on wages — such as technological advances that have lowered demand for routine jobs, reduced competition in some industries and the emergence of the so-called gig economy that has taken away bargaining power for some workers.
In the months ahead, however, Wilkins says the central bank predicts Canada’s economic expansion to pick up its pace after a recent slow patch — and she anticipates wage growth will eventually accelerate along with it.
The Canadian Press
