LOW-WAGE GROWTH OUTPACING THAT OF AVERAGE EARNERS.

Steady decline in job quality

If your wages are stuck in the middle of the Canadian economy, you’re not only losing ground to top earners — even people in the bottom 20 per cent are catching up to you, a new report says.

In a report on the quality of employment in Canada published Monday, CIBC deputy chief economist Benjamin Tal looked at wage growth across the country from 1997 to 2015 and found people in the middle 30-to 60-per-cent range of wage earnings have had some of the worst salary increases in the country.

“It’s not like (wages) are falling, but clearly more and more there is an increase in the number of people making less than the average,” Tal said in an interview.

The report shows that people in the bottom 10 and 20 per cent of wage earners had anywhere from 3.3 per cent to 3.5 per cent in annual wage growth from 1997 to 2015, while those smack-dab in the middle of the Canadian economy saw more like 3.2 per cent annual wage growth during the period.

“The good news is that those at the lowest end of the wage spectrum are seeing relatively healthy wage gains — not due to bargaining power but mostly due to policy changes regarding minimum wages. But the group closer to the middle of the wage spectrum have seen sub-par growth,” Tal said.

At the top, among the leading 10 per cent of earners, wages have grown by about 3.7 per cent annually, driven by what Tal said is a shortage of employees for new economy jobs that employers are trying to fill.

“There is a mismatch in the labour market between jobs that we need and can’t find the people and many jobs that we don’t need and have excess supply,” the economist said.

He said the share of lowpaying jobs in Canada has been on the rise for the past two decades, and part-time jobs also have risen after a shift during the recession. The percentage of all jobs that were part-time rose to 20 per cent from 18 per cent during the recessionary peak, but remains at 19.5 per cent today.

“From a full-cycle perspective, the rise in part-time employment probably reflects some demographic forces,” Tal said, noting a majority of the growth in part-time workers was among those 55 and older.

“The compensation distribution of full-time paidemployment has worsened over the past decade with the number of jobs in lower-paying industries rising faster.”

He said the share of workers paid below the average wage continues to rise — and was 61 per cent in 2015, “a trend consistent with a widening wage gap symptomatic of deteriorating labour market quality.”

For the age group between 25 to 54, Tal found the share of lower-paying jobs has been on the rise, too.

He cautions his findings are not the ultimate measure because they don’t consider job satisfaction or work environment.

“The decline in employment quality over the past two decades (does not) mean that we have turned into a nation of hamburger flippers,” he said.

“It suggests that the distribution of employment in Canada is not as favourable as it used to be, looking strictly at compensation. Lower quality employment might help to explain the sluggish growth in personal income in the past two decades and might provide some insights on the ability of workers, in aggregate, to absorb future economic shocks.”

DISTRIBUTION OF EMPLOYMENT IN CANADA IS NOT AS FAVOURABLE AS IT USED TO BE.