Why Have Real Wages Lagged Labour Productivity Growth in Canada?

Andrew Sharpe, Jean-Francois Arsenault () and Peter Harrison ()

International Productivity Monitor, 2008, vol. 17, 16-27

Abstract: The most direct mechanism by which labour productivity affects living standards is through real wages, that is, wages adjusted to reflect the cost of living. Between 1980 and 2005, the median real earnings of Canadians workers stagnated, while labour productivity rose 37 per cent. This article analyzes the reasons for this situation. It identifies four factors of roughly equal importance: rising earning inequalities; falling terms of trade for labour; a decrease in labour’s share of GDP; and measurement issues.

Keywords: Productivity; Real Wages; Earnings; Labour Share; Inequalities (search for similar items in EconPapers)
JEL-codes: E20 E25 J38 J39 O40 O51 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (14)

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