Tuesday, June 19, 2007

Wages and Inflation by Province

It is rather surprising that Alberta should actually experience a decline in real wages during its boom!

Wages and Inflation by Province, May 2006 - May 2007
Posted by Erin Weir under labour market, inflation, Alberta.
June 19th, 2007
Comments: none

Relative to inflation, Albertans are being paid less per hour than they were a year ago. Today, Statistics Canada released Consumer Price Index figures for May 2007. Comparing these figures with the latest Labour Force Survey reveals that Canadian wages grew only 0.8% more than Canadian prices from May 2006 through May 2007.
As always, the national figure masks significant regional variations. Although Alberta was the only province in which real wages fell, Quebec’s wages barely kept pace with inflation. Real wages apparently rose more strongly in Atlantic Canada, especially in New Brunswick. However, monthly survey data for the smaller provinces must be taken with a grain of salt.
Average Hourly Wages and CPI Inflation, May 2006 - May 2007
Wages Inflation Real Wages
Canada 3.0% 2.2% 0.8%
Newfoundland 4.1% 0.7% 3.4%
PEI 4.6% 1.2% 3.4%
Nova Scotia 5.5% 1.7% 3.8%
New Brunswick 7.3% 1.4% 5.9%
Quebec 1.7% 1.6% 0.1%
Ontario 2.5% 1.9% 0.6%
Manitoba 5.0% 2.3% 2.7%
Saskatchewan 3.6% 2.7% 0.9%
Alberta 4.9% 5.0% (0.1%)
British Columbia 3.6% 1.7% 1.9%
Declining real wages in Alberta undermine the conventional wisdom of insurmountable labour shortages and significant barriers to labour mobility between provinces. If supposed labour shortages were not being addressed by inter-provincial migration, the result would presumably have been a large increase in Alberta’s wages.

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