Why We'd Rather Be in Canada: Wages Up

With the release of the second quarter (Q2) 2011 PayScale Index, we added tracking of national pay trends for Canada. The striking difference is how much better Canadian wages have bounced back from the recession than in the United States.

In this blog post, we will look at Canadian trends in pay over the last 5 years, and see what the PayScale data about Canadian wages through the first six months of 2011 tell us about how the demand for workers is recovering.

Finally, we will look at other economic measures, like unemployment and gross domestic product (GDP) growth in Canada, and see if Canadian workers' wages are subject to the same supply and demand forces we have been seeing in the PayScale Index for the United States.

National pay trends are interesting, but are wages for your job trending up? Find out with a free PayScale salary report.

The following two charts say it all. These are from the Q2 2011 PayScale Index Report:

The PayScale Index: National (CA)

The PayScale Index uses 2006 average total cash compensation as a baseline.

National (CA)

The PayScale Index: National (US)

The PayScale Index uses 2006 average total cash compensation as a baseline.

National (US)

The painful difference is that Canadian wages are bouncing back, up about 1.5 percent in the last year or so, while US wages are unchanged over the same time period.

So while Canadians are enjoying wages today (in Canadian dollars, not adjusted for inflation) greater than the peak in 2008, the typical US worker has wages about 1.5% lower than in 2008, and even heading slightly downward in Q2 2011 vs. the quarter before.

Why are wages rising faster in Canada? The reason for this is simple. Employment is up in Canada, and unemployment down, while in the US employment is virtually unchanged over the last year, and unemployment is staying high.

In the last 1 1/2 years, employment in the US is up less than 1 million in a workforce of 139 million. In contrast,employment in Canada is also up a little under 1 million in the same time, but that is for a workforce of only 17 million workers. The Canadian 5% employment growth in the last 1 1/2 years is a lot better than the US 0.7%.

The net result is that Canada currently has 7.4% unemployment, while the US is still at 9.2%.

What about the price of goods? Over the last 1.5 years, the exchange rates have the CA dollar rising about 10% vs. the US dollar. That means anything Canadians buy now from the US effectively has a 10% discount relative to the beginning of 2010.

Finally, the Canadian economy, as measured by real gross domestic product (GDP) is even growing faster: over the 12 months through about April 2011 (latest data available), Canadian real GDP is up 2.8%, while the US is up only about 2.3%.

Cheaper goods, lower unemployment, faster growing economy, and rising wages - all in all, I'd rather be in Canada :-)

Who knows what the future will bring, but are you being paid what you are worth now? When you want powerful salary data and comparisons customized for your exact position or job offer, be sure to build a complete profile by takingPayScale's full salary survey.

Cheers,

Al Lee
Director of Quantitative Analysis, PayScale, Inc.

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Posted by Dr. Al Lee, PhD on July 14, 2011 in Salary Facts & Fun | Permalink

Immigration integration focus of new program

The City of Ottawa unveiled a new plan on Monday to attract immigrants and better integrate those who are already here.

The plan brings together a dozen immigration and settlement agencies, as well as employers, social service providers and others.

Those who work with immigrants say the new approach reflects a widespread consensus that the present system is no longer working as well as it once did, either for immigrants or their children.

Naythar Seer is a Karen refugee from Burma. Relentlessly upbeat and optimistic, he's soon due to start a degree in civil engineering that he hopes will launch him on the career he wants.

But he admits landing a job in his new country has not been easy.

"I have tried to apply for a job at Wal-Mart, and I never got a job there," he told CBC News. "I have a friend who works for a cleaner and through him, I got a job."

Seer says he might have remained unemployed if it weren't for that friend's help.

Mohammed Dalmar helps immigrants find jobs and he said the ability to network is crucial for all job-seekers, including immigrants.

"That lack of networking affects also the children of immigrants," he said. "Someone who went to school here, who did their university, and they're not getting jobs — we have many examples of this — because they're not well-connected."

'A need to connect'

Hindia Mohamoud of Catholic Immigration Services said the new plan will recognize that networking is essential to getting ahead in Canada, which poses a challenge for new arrivals.

"To bridge that gap of not knowing there is a need to connect, not only in economic areas but also in the social areas, so that people are not isolated from the opportunities that our city offers."

Mohamoud said the new plan will try various new approaches, including trying to create more opportunities for immigrants to form social connections that can help them. It also aims to recruit the support of small- and medium-sized business owners to employ more new arrivals.

Mohamoud said that means organizing events that bring together people of different backgrounds.

Dropout rates for the children of immigrants are reaching alarming levels in some parts of the city, she said, and there's a strong consensus among people who work in the field that something has to change.

With files from CBC's Evan Dyer

Federal deficit narrows in June

OTTAWA — Canada's budget deficit continued to decline in June from year-earlier levels, with revenues rising 8.7 per cent, despite signs of a slowing economy.

The shortfall for the month was $2.2 billion, down from a deficit of $2.8 billion in June 2010, the Finance Department said Friday.

The government brought in $19.4 billion, up $1.6 billion, in June, "reflecting increases in most revenues streams," the department said. Among them, personal income tax revenues rose by $600 million, or 7.5 per cent.

Meanwhile, program expenses — including transfer payments — rose by $900 million, or 5.1 per cent, to $19 billion. Public debt charges rose by $32 million, or 1.2 per cent.

For the first three months of the fiscal year, the department said the deficit narrowed to $5.5 billion from $7.2 billion in the same period a year earlier.

Between April and June, revenues rose by $2.6 billion, or 4.8 per cent, to $57.7 billion — mainly due to higher income tax revenues, which partially offset lower goods and service tax revenues, the department said.

During the three-month period, program spending was up $200 million, or 0.4 per cent, and public debt charges rose by $700 million, or 9.3 per cent.

Although data "suggest that economic growth has slowed recently," the department said "financial results through the first three months of the 2011-12 fiscal year are broadly consistent with those projected . . . budget 2011."

In its June 6 budget, the government trimmed its deficit forecast for the current year and said it would eliminate its shortfall a year ahead of schedule.

Finance Minister Jim Flaherty said the government would aimed for $4 billion in annual savings and balance the budget by 2014-15. In the pre-election March budget, Flaherty had forecast the deficit would be erased by 2015-16.

For 2010-11, preliminary estimates put the shortfall at $36.2 billion, down from the previous forecast of $40.5 billion. The government expects a 2011-12 deficit of $32.3 billion.

CNS 8/26/11 11:48:55

© The Financial Post