Positive Developments for Workers, Lingering Cost Pressures for Businesses 

Jul 8, 2024 | Business News and Tips, Front Page, Workforce

This past week, StatsCan released average weekly earnings data showing Manitoba has seen a 4.5% increase in weekly earnings in the past year. This is positive news for Manitoban workers as earnings growth outpaces the recently released Consumer Price Index data where provincial inflation increased by only 1.3% over the last year. 

Interestingly, despite the recent period of increased inflation, Manitoba workers earned 0.8% more relative to inflation in 2023 than they did in 2013 indicating that workers are modestly better-off now than a decade ago. Real (inflation-adjusted) wage growth is a metric that demonstrates potential quality of life increases as a greater wage relative to inflation yields more disposable income for workers. 

This picture is mixed when comparing Manitoba results to other jurisdictions. Over the same period, the Canadian average for increases in inflation-adjusted hourly wage reached 7% so Manitoba lagged significantly. However, it was ahead of Saskatchewan (-2.1%) and Alberta (-5.5%); see Figure 1. When looking at an international context, Canada as whole fared better than most G7 countries, with the US a noted step ahead; see Figure 2. 

 

Figure 1:Provincial real wage changes, 2013 to 2023, courtesy of CBC NewsFigure 2: International real wage growth comparison, courtesy of the US Treasury [1]

Notably, CFIB also released their monthly business barometer, and wage costs were the largest input cost constraint for small businesses in Manitoba (surpassing insurance costs from last month). This indicates that while other inflationary pressures may be easing, labour costs will continue to be a challenge. Wage growth expectations of workers will likely lag inflation as people feel their wages need to grow to keep up with the inflation of the past few years (despite evidence that this growth has already occurred). 

So, while workers may have seen benefits, businesses are faced with increasing costs to operate. While Manitoba’s average weekly earnings grew 4.5% overall, there were several sectors that saw labour costs more than double that average. Accommodation and food services, arts, entertainment and recreation, and other services (except public administration) were sectors with weekly earnings growth of more than 10% year-over-year as of April 2024. This is pointing to a challenge for the tourism industry, as two of these sectors are directly linked to tourism and typically have labour as a high percentage of overall costs. 

Table 1: Year over year increases in average weekly earnings by Manitoban industry, April 2024, StatsCan data 

All Industries  4.50% 
Other services (except public administration)  15.30% 
Arts, entertainment and recreation  14.00% 
Accommodation and food services   10.50% 
Health care and social assistance   7.90% 
Trade  6.60% 
Management of companies and enterprises  6.20% 
Service producing industries  5.10% 
Public administration    3.80% 
Educational services   3.30% 
Manufacturing   3.10% 
Real estate and rental and leasing   2.80% 
Professional, scientific and technical services  2.60% 
Transportation and warehousing   2.20% 
Goods producing industries   2.10% 
Administrative and support, waste management and remediation services   2.10% 
Construction  1.70% 
Finance and insurance  0.50% 
Information and cultural industries   -2.10% 

 

The 2023 Business Outlook Survey by the Manitoba Chambers of Commerce highlighted inflation as the most significant challenge confronting businesses in Manitoba. Although the inflationary cost increases for numerous business inputs are slowly receding, the Manitoba Chambers of Commerce urges governments to acknowledge that a multitude of businesses are still facing wage cost pressures. These pressures are affecting their potential for growth and continued viability. It is crucial for governments to refrain from imposing additional cost burdens through taxation, regulations, or other policy measures. The Manitoba Chambers of Commerce advocates for governments to persist in their endeavors to mitigate, rather than intensify, operational costs, especially for small businesses. 

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