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Podcast: Rising Inflation Creates Tension in Collective Bargaining
With year-over-year inflation topping 8%, far in advance of nominal wage gains, workers in all parts of Canada’s economy are struggling to protect their real living standards. Real wages have declined by more than 3% in the last 12 months alone, with further erosion pegged in the months ahead. Collective bargaining tables in both the private and public sectors have been roiled by the acceleration in inflation. Workers are determined to try to keep up with inflation. And that determination is only heightened by the fact that corporate profits have increased so strongly alongside the rise in consumer prices. Some major strikes have already occurred (such as in Ontario’s construction…
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Snatching Defeat From the Jaws of Victory
The Bank of Canada has increased interest rates three times since March, with another (potentially large) increase predicted on July 13. Other central banks around the world are also quickly increasing interest rates to reduce domestic spending, slow down growth and job-creation, and try to reduce inflation back to their preferred targets (2% in Canada’s case). In this commentary (originally published in the Toronto Star), Centre for Future Work Director Jim Stanford considers the risks that this reflexive response to inflation will derail the strong economic recovery that has been experienced since the pandemic. A Pointless Sacrifice to a Mystical Two Per Cent God By Jim Stanford Canada’s economy rebounded…
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Wage Growth Picking Up, but Shows Important Differences Across Categories
There are some signs of a modest acceleration in nominal wage growth in Canada. This is not surprising, given both relatively tight labour markets and the impact of accelerating inflation on the wage demands of Canadian workers. Average hourly wages paid across the labour market grew 3.9% in the 12 months ending in May (latest data). That is an increase from year-over-year growth rates of 2.5% to 3% recorded in late 2021 and early in 2022. Wages are still growing at only about half the pace of consumer prices, which grew 7.7% (according to the Consumer Price Index) over the same period. Since wage growth is weaker than price inflation,…