Wage growth in New Brunswick, 1997-2017 | UNB

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NB-IRDT

Wage growth in New Brunswick, 1997-2017

Author: Patrick Coe, J.C. Herbert Emery, Derek Mikola
Year: 2019
Category: Economy and Labour

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Recently, there have been growing concerns over the state of wages in New Brunswick. After all, the province has seen slow overall economic growth, and the labour market has undergone technological changes in production that could potentially impact wages through reduced labour demands. Is it possible these or other factors have slowed down wage growth in the province? 

According to researchers at the New Brunswick Institute for Research, Data and Training (NB-IRDT), wages can serve as an indicator of quality of life, with wage stagnation indicating a stagnant quality of life, as well as a lack of growth in labour productivity.

To ascertain the status of real wages in New Brunswick, this report uses data from the Statistics Canada CANSIM database and focuses on average and median real hourly wages and real weekly earnings, categorized by industry. It compares the evolution of weekly and hourly earnings in the province to estimate the rate of wage growth in New Brunswick, which it also compares to wage growth in Ontario and Canada overall. The results show that wage growth in New Brunswick has followed a trend similar to that of Ontario and Canada; however, there is a relatively constant wage gap between average New Brunswick wages and average Ontario and Canadian wages – of approximately $5 per hour. 

Findings show that long-term wage growth in New Brunswick is associated with national productivity growth, rather than provincial growth. This means that changes to the labour market are more visible in changes in employment, rather than wage rates. A decrease in labour demand will result in fewer employed workers, rather than slower wage growth. This suggests that policies aiming to stimulate the New Brunswick economy should target growing labour demand, rather than pushing for isolated increases in labour supply.