What’s Happening to Wages?

One thing I find a bit annoying over at Statscan is that detailed tables related to a release sometimes appear on the web site a few days after headline numbers are released in the Daily.

I was phoned by a couple of reporters seeking comment following the release of wage data (from the Survey of Employment, Earnings and Hours) in the Daily on August 26. The detailed Tables were not published until  September 2.

The headline number from the Daily was that average weekly wages had jumped 4.0% in the year June, 2009 to June, 2010, the largest increase since February, 2008. Parts of the media seem to have seen this as evidence of wages getting out of line, the end of recession etc. etc.

I pointed out that it could partly be an increased hours story as opposed to an hourly wage story, and that the Labour Force survey showed  an increase of hourly wages of just 1,7% for the same period. (The Daily includes a Box also warning readers that several factors can drive average weekly earnings.)

It turns out when I looked at the Tables posted on September 2 that fixed weight average hourly earnings of all workers (hourly and salaried) rose by less -than 4%  – in fact by 3.7% – over the year -showing that at least part of the 4% gain was indeed driven by increased hours as opposed to increased hourly wages, and also by sectoral shifts in employment.

What is especially interesting (now that we can see the Tables) is that average weekly earnings of salaried employees rose by 5.5% over the year. This seems to be partly a time worked story, since the standard work week rose from 36.8 to 37. 1 hours. Meanwhile, average hourly earnings of hourly paid workers increased by only 2.7% – well below that 4% headline number.

That still leaves a significant discrepancy between the LFS and the SEPH data. There are lots of goods reasons why there will be differences in any given month which will disappear when averaged over time.

My take is that we are not seeing a significant increase in real hourly wages, and that Statscan might be a little more careful in how they headline the Daily release.

3 comments

  • good luck with trying to make sense of it. The data is about as jumpy as fish during shad fly season on lake Superior.

    A couple things- watch for the increased hours (as you state)- watch for bonus pay and others forms of non standard pay- and lastly watch for stratum jumpers.

    It rides the payroll file so inherently it can be a good source- however month to month it can be quite jumpy.

    The media sure is looking for any scrap these days to spin it postively. Yesterday in the globe the number one online story was the piece on the US jobless rate marks a new permanent shift in the economy.

    It surely got under my skin- as it was the traditional response to unemployment that I have seen in almost a cyclical fashion. It is not the economies fault that we have unemployment- it is the worker’s fault.

    Surely we cannot be going down that trail with the amount of unemployment that we have. Damn we don;t need Fox news north if we are going to start hearing that from or apparently middling news rags like the G& M. Who wrote that – let me check Kevin Carmichael.

    It is amazing to hear these stories- kind of like folksy old tales from the cottage- maybe Kevin is enjoying himself up at the cottage and thought he would just rehash some old notions.

    Astonishing- I was not expecting such discourse change until the official rate hit around 6.5%.

    pt

  • Not to mention that a year ago is a really bad time to compare anything to. It’s not like the economy was in a normal state at that time.

  • I always distrust average changes when the spread is so large. How much increase was there in the lowest 20%? How about the highest 20%? The median? The question to ask after how much money was made is who made it.

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