• Commentary,  Inequality,  Inflation,  Macroeconomics,  Wages

    New Video: Profits, not Wages, are the Driving Force Behind Inflation

    What’s causing the current surge in inflation? And what should be done about it? In this new video, the latest in our “Debunkers’ Academy” series, Jim Stanford from the Centre for Future Work shows it’s not higher wages driving higher prices — in fact, wages are lagging far behind prices, and falling in real terms. The real culprit is corporations, who have taken advantage of the disruptions of the pandemic to jack up their prices (and their profits). This inflation is different than the 1970s, and it needs a different solution. Watch and learn! https://www.youtube.com/watch?v=8DgwM7nruQg

  • Commentary,  Inflation,  Macroeconomics,  Wages

    Business Profits from Inflation, but Workers Will Pay to Bring it Down

    As the Bank of Canada announced another increase in its trend-setting interest rate today, new data from Statistics Canada confirms businesses have pocketed record-breaking profits from accelerating inflation, while workers’ wages lag far behind. Centre for Future Work analysis of national income accounts released yesterday by Statistics Canada indicate that after-tax corporate profits reached their highest share of GDP ever in the first quarter of 2022, as inflation surged. After-tax profits grew 11% in the quarter (compared to the fourth quarter of 2021), to an annualized total of over $500 billion. That represents the highest share of total GDP (18.8%) since Statistics Canada began collecting GDP data. Meanwhile, workers’ wages…

  • Commentary,  Inflation,  Macroeconomics,  Wages

    Don’t Make Workers Pay for Inflation they Didn’t Cause

    The gap between inflation and wage growth for Canadian workers is exacting a punishing toll on real living standards. In the last 12 months alone, consumer prices increased more than twice as fast as wages. The gap between the two translates into a substantial reduction in real living standards for workers. In this commentary (which originally appeared in the Toronto Star), Centre for Future Work Director Jim Stanford provides evidence that the current surge in inflation cannot possibly be attributed to labour costs. Business profits have widened as inflation picked up steam. Lifting wages (for both private and public sector workers) to protect against the effects of inflation does not…

  • Commentary,  COVID,  Inflation,  Macroeconomics,  Wages

    Inflation: Causes, Consequences, and Cures

    The surge in inflation in recent months has generated great concern and debate in Canada. This inflation is clearly the result of unique and often external factors related to the COVID pandemic and subsequent recovery: including disruptions in global supply chains (such as the chaos in superconductor markets), energy shocks (made worse by the war in Ukraine), and shifts in consumer demand away from services and towards goods products (due to restrictions on many service activities during the pandemic). Despite the unique nature of this inflation, anti-inflation hawks are now dusting off their old policy recipes to restrain domestic demand and employment, and wrestle inflation back to the ground. The…

  • Commentary,  Inflation,  Macroeconomics,  Wages

    Wages Gain Steam, But Not Enough to Keep Up With Inflation

    The latest employment data from Statistics Canada confirm that Canada’s post-COVID recovery remains strong. The unemployment rate in March fell to 5.3%, the lowest since Statistics Canada began its monthly labour force survey in 1976.  Another positive sign was an uptick in the growth of average wages. Hourly wages grew by 3.4% in the year ending in March, and weekly wages grew by 3.9% in the same period (weekly wages grew faster than hourly wages thanks to increases in full-time work and average hours of work). That represents a modest acceleration in wage growth from recent months. However, the pace of wage growth has really just returned to normal pre-pandemic…

  • Commentary,  Employment & Unemployment,  Wages

    Getting Real About Recruitment and Retention in a “Labour Shortage”

    Employers complain they can’t find and keep the right people to run their businesses, in this era of supposed labour “shortage”. Have they tried treating them better … starting with paying more? Not always. Sometimes the simplest answers are the last ones considered. While employers wax eloquent about trying to build a better “culture” in their workplaces, and tap into workers’ desire to “do good” in the world, they shouldn’t forget the imperative that workers have to pay their bills, put a roof over their heads, and (hopefully) prepare for retirement. Improving pay and benefits are the first things employers should do, if they are genuine about addressing their recruitment…

  • Industry & Sector,  Research,  Trade Unions,  Wages

    Solid Wage Gains for Construction Workers Needed to Cement Productivity Gains

    Paycheques for workers in Ontario’s booming construction industry are coming up short despite surging productivity and a sharp rise in building activity, a new report from the Centre for Future Work shows. Relative to consumer prices, the real purchasing power of construction wages has been stagnant in recent years even though real labour productivity in the sector has grown very strongly. Workers are generating more output and revenue for their employers, but not getting their fair share of the value they’re creating. Nominal wages in construction grew at an average rate of 1.9% over the last five years, considerably slower than broader wages in Ontario’s labour market (which grew at…

  • COVID,  Research,  Wages

    10 Paid Sick Days Would Have Little Impact on Business Costs

    A proposed 10-day paid sick leave policy in B.C. will increase overall business costs by just one-fifth of one percent. That’s the finding of new research from the Centre for Future Work. The new report, by Centre Director Jim Stanford, calculates the impact of the proposed policy on sick leave entitlements, absences, replacement staff costs, and bottom-line business expenses. The ultimate impact of paid sick days is estimated at just 0.21% of existing business expenses, and will have no measurable impact on overall competitiveness or profitability. The findings discredit claims by some business lobbyists that 10 days of paid sick leave would cause widespread bankruptcies and job loss. Moreover, these…

  • Commentary,  Employment & Unemployment,  Wages

    Learning from Minimum Wage History

    This week Ontario increased its provincial minimum wage by a whole dime: from $14.25 per hour to $14.35. Don’t spend it all in one place, oh ye minimum wage workers. That 0.7% wage increase, saved up for a whole week for a full-time employee, will get you a small latte at Starbucks. Or, for those with humbler tastes, two whole double-doubles at Timmie’s. Many commentators argued that such a stingy wage increase was offensive to the ‘essential’ workers whose humble but determined (and often dangerous) work is getting us through the pandemic: grocery store cashiers, building cleaners, fast food chefs, and delivery drivers. We learned that what they do is…

  • Commentary,  Employment & Unemployment,  Wages

    Employer Complaints of ‘Labour Shortage’ Lead to Attacks on Income Security

    Employer organizations are stepping up complaints about a purported ‘labour shortage’ that they say is holding back Canada’s employment recovery. These complaints are typically accompanied by demands that government push more workers into the labour market – by cutting back income support programs (like Employment Insurance and the CRB), and increasing inflow of temporary foreign workers (hired in insecure roles with limited protections and low wages). In this commentary (originally published in the Toronto Star), Centre for Future Work Director disputes whether a labour shortage truly exists (given persistent high unemployment), and argues that improving wages and working conditions are better strategies for recruiting and retaining workers. Hard Data Does…