Another Decade, Another 4.8%

It’s great to have publications like The Western Standard keeping us on our toes. The following excerpt is from an article in today’s edition, “New Economy, Old Prejudices; Big Labour’s jobs campaign flies in the face of employment and wage growth,” that does not (yet) seem to be available online:

The CLC contends that Canada’s loss of a quarter-million manufacturing jobs over the past five years means Canadians are being forced into lower-paying service-sector jobs. “Manufacturing jobs are being replaced by substantially less-good jobs,” CLC senior economist Erin Weir says. “I think the issue of job quality is quite important here. . . . Our standard of living is improving less than it otherwise could have or should have.”

It’s difficult to see where the problem is, though. Yes, blue-collar jobs are being lost and new service-sector and high-tech jobs created, but there’s no evidence the new jobs are lower paying. Niels Veldhuis, a senior research economist at Vancouver’s Fraser Institute, a free-market think-tank, points out that Statistics Canada’s labour force survey shows there was a 4.8 per cent increase in real (adjusted for inflation) average hourly wages between 1997 and 2006, from $18.80 to $19.70 (in 2006 dollars). The increase was even greater for full-time workers.

Certainly, there is ample room for legitimate debate about the manufacturing crisis, its implications, and possible policy responses. But does either the Fraser Institute or The Western Standard genuinely believe that 4.8% real-wage growth over ten years (almost half of one-percent per year!) is evidence of a strong labour market?

One comment

  • “It’s difficult to see where the problem is, though.”

    How one debates with the likes of these finely tuned machines is beyond me. Given that, it is the role of PEF like researchers and economists to keep their eye on the ball and keep bringing the evidence to bear where it matters- within the public space. I think there is some pretty good spray for irritants like these, at least it seemed to have worked well over the weekend in Algonquin park.

Leave a Reply

Your email address will not be published.