Latest data shows worker shortage is helping Canadians get richer: Don Pittis

An archaeologist in London, U.K., digs out skeletons that might be the remains of a victim of the London Plague, which came about 300 years after the Black Death epidemic of bubonic plague of the mid-1300s that killed millions. That earlier devastating death toll led to a shortage of workers — and a higher living standard for those who survived, according to some economists. (Andrew Winning/Reuters)

That’s right, the latest data shows that the shortage of workers is helping Canadians enrich themselves. It is considered that probably if your wages do not increase, maybe it’s time to resign and find a new job.

It should be noted that if the world had another Great Plague of the type that swept Europe in the thirteenth century, it is likely that their salary would increase considerably. We're talking about the negative side, you would only get the increase if you were not between 30 to 50 percent of the population killed by the disease.

In this way, it is necessary to emphasize that, according to the conventional rules of the economy, it is quite reasonable that the shortage of workers leads to an increase in wages, just as there is a shortage of oil that raises the price of crude oil. In fact, according to many economic historians, while the 1300s did not have a salaried economy as we think today, after a period of disruption caused by a mass extinction, living conditions began to improve for the poorest workers. People with skills did it even better.

Significant salary increase

It should be noted that this intuitive relationship between the labor shortage and its rise in price is one of the reasons why experts have been perplexed as to the reason why Canadian wage growth has remained stagnant in recent years, even so, while the unemployment rate remained close to historical lows.

Now, it is necessary to indicate that, as of Friday, there is evidence that it has changed. Just as the unemployment rate reached a minimum of 43 years of 5.4 percent, there was also an increase in wages, with a general rate of increase of 2.8 percent. This is understood to be well above the general increase in prices indicated by the latest inflation rate, which means that Canadian wage earners, on average, are becoming richer in terms of wages to take home.

In addition to this, the data show that, despite the influx of potential workers through immigration, a declining participation rate indicates that there are fewer Canadians in the labor force. Many are retiring. Thus, it is well known that wage increases depend on the place where you live and the sector in which you work. But it is necessary to indicate that one thing is clear, for the salary increase to reach an average of 2.8 percent, many people must have an increase of more.

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Source: Don Pittis | CBC News