LMIC senior economist Brittany Feor presented on whether wages are keeping up with inflation. During the Q&A, audience members engaged in discussion about potential areas of future research, such as whether wage differences between genders could be influenced by the choice of STEM versus non-STEM fields, as well as examining the impact of parental leave policies on workforce dynamics.

1. Recent trends in the real wage
distribution in Canada
Evidence from the Labour Force Survey
2009 to 2022
2023.06.03 Brittany Feor, Senior Economist

2. 2
• Motivation
• Research Question
• Data: Labour Force Survey (LFS)
• Methodology: Real wage distributions and growth
• Preliminary findings
• Part 1: Real wage distribution over the years and by NOC 2021 TEER
• Part 2: Real wage analysis by sex and occupation for core-age
(25 – 54 years) workers
• Conclusion and next steps
Outline

3. 3
• COVID-19 job losses concentrated in low-wage occupations
• Inflation climbs as the labour market recovers; downward pressure on real wages
• Low-wage workers spend a higher share of their earnings on consumption goods
compared to mid-, high-wage workers
• Income inequality can be exacerbated if
1. real wage losses (gains) are concentrated at the bottom (top), and
2. relative price increases for the basket of goods consumed by households along
the wage distribution
Motivation
Real wages, inflation and income inequality
Going forward: The interaction of socio-economic characteristics is important for understanding
dynamics along the real wage distribution

4. 4
Research Question
• How has the real wage distribution evolved post-global financial crisis, through the
pandemic and subsequent period of high inflation?
• How do we evaluate the changes in the real wage distribution to make
meaningful insights?
• How do socio-economic characteristics feed into the overall real wage
distribution and what role does policy play in addressing unequal labour market
outcomes and vulnerabilities?
Data Source: Labour Force Survey
• Statistics Canada Public Use Microdata Files (PUMF) and Real-Time Remote Access (RTRA)
• Hourly earnings – all wages are adjusted for inflation using mean CPI in 2019
• Sex and age – focus on core-age workers (25 to 54 years)
• NOC 2021; Training Education Experience and Responsibility (TEER)

5. 5
TEER TEER Labels used in this presentation
0 Management
1 University; TEER 2 EX
2 PS(2-3 yrs); App(2-5 yrs); Supervisory or safety; TEER 3 EX
3 Some PS(<2yrs); App(<2 yrs); Some HS & OJT(6+ months); TEER 4 EX
4 HS; Some HS & OJT (weeks); TEER 5 EX
5 Short demo
NEW in NOC 2021: Training, Experience, Education, Responsibility (TEER)
**TEER 1 – 4 include positions that require adequate experience in the TEER below

6. 6
Methodology
All wage data in this presentation is the mean hourly wage from the labour force survey
adjusted for inflation using mean CPI in 2019.
Part 1: Overall trends
• All occupation data uses the new
NOC 2021 and TEER system
• Real wage distributions are
visualized using mean real wage
by decile
Part 2: Men and women;
core-age (25 to 54 years)
• Employment and real wage by
broad occupation group
(NOC 1-digit) by sex
• Compare mean wage by decile
for sex-specific real wage
distributions in 2022

7. 7
Analysis
Preliminary findings
7
Part 1: Real wage distributions between 2009 and 2022
• Where is the real wage growth concentrated?
• How has the real wage distribution shifted by TEER?
Part 2: Real wage dynamics by occupation and sex
(25 to 54 years)
• How are men and women distributed across occupations?
• Compare the sex-specific real wage distributions

8. 8
Rate of increase across the distribution accelerates in the top 20%
Real wage gains between 2019 and 2022 concentrated in the bottom 80%
Mean
real
wage
Deciles
2009
2014
2019
2022

9. 9
Mean real hourly wages by broad occupation group, 2022
Highest in management occupations and lowest in sales and service occupations
Mean real wages
Management
Natural and applied sciences
Education law and social, community
and government services
Business, finance and administration
Trades, transport and
equipment operators
Art, culture, recreation and sport
Natural resources, agriculture and
related production
Manufacturing and utilities
Sales and services
Health

10. 10
Real wage gains are largest in Management TEER
Management TEER real wage distribution strictly above the other TEER groups, 2022
Mean
real
wage
by
decile
0: Management
1: University; TEER 2 EX
2: PS (2-3 yrs); App (2-5 yrs);
Supervisor/Safety; TEER 3 EX
3: Some PS (< 2 yrs); App
(< 2 yrs); Some HS & OJT
(6+ months); TEER 4 EX
4: HS; Some HS & OJT
(weeks); TEER 5 EX
5: Short demo
TEER
2009 2022
2019
2014

11. 11
Large gains for the top and bottom of Management TEER from 2019 to 2022
Losses in the middle across all TEER groups
0: Management
1: University; TEER 2 EX
2: PS (2-3 yrs); App (2-5 yrs);
Supervisor/Safety; TEER 3 EX
3: Some PS (< 2 yrs); App
(< 2 yrs); Some HS & OJT
(6+ months); TEER 4 EX
4: HS; Some HS & OJT
(weeks); TEER 5 EX
5: Short demo
TEER
Dollar
change
in
real
wage
from
2019
to
2022
Decile

12. 12
Part 1: Summary
Real wages and workers
• Finding 1: Real wages have gone up across the
distribution despite recent high inflation
• Finding 2: Real wage growth is higher in the top 10%
• Finding 3: Management occupations have the highest
mean hourly wage; sales and service occupations have the
lowest hourly wage
• Finding 4: Highest real wage gains are in the management
TEER; compared to 2019 real wages are down in the
middle of the distribution for each TEER
12
12
Takeaway: Occupation is an important predictor of wage
especially non-management vs management occupations
and by TEER (emphasis on education)

13. 13
Over 90% of workers in trades and transportation are men; over 80% of workers in heath care
are women (2022)
Share of employment
Trades, transport and equipment
operators
Natural resources, agriculture and
related production
Natural and applied sciences
Manufacturing and utilities
Management
Art, culture, recreation and sport
Business, finance and administration
Education, law and social, community
and government services
Health
Sales and services

14. 14
Ratio of real wages for women compared to men by decile 2009 to 2022
Wage gap between sex-specific real wage distributions declines
Real
wage
for
women
/
Real
wage
for
men
2009
2014
2019
2022
2023

15. 15
Part 2: Summary
Core-age men and women & real wages
• Finding 1: Women are more likely to work in health care,
education, social services and administrative occupations
• Finding 2: Men are more likely to work in trades and
transportation, natural resources and natural and applied
sciences
• Finding 3: Along the sex-specific real wage distribution the
wage difference between men and women varies, smallest
at the bottom
15
15
Takeaway: Men and women earn different wages within
and across occupations, sort into different occupations so
the real wage distribution is different for men and women

16. 16
Conclusion
Next steps (ongoing research project)
• Dig into the real wage dynamics during the recent high
inflation period
• Explore the characteristics of workers by TEER;
educational attainment, age, sex, hours worked, detailed
and broad occupational makeup.
• Disaggregate age further to capture changes along the
career path: 15-24, 25-34, 35-44, 45-54, 55+ by
occupation and sex.
• Consider more factors that influence wage outcomes
such as education, tenure, hours worked (weekly
earnings), children
16
16

17. 17
Questions?

18. 18
lmic-cimt.ca @LMIC_CIMT lmic-cimt

19. 19
Appendix
• Figure 1: Mean real hourly wage for men, women, both sexes in 2022
by NOC 1-digit and age
19
19

20. 20
Mean real hourly wage for men, women, both sexes in 2022 by NOC 1-digit and age
Figure 1