Wages are going up in Alberta, but not enough to match inflation

Wages are going up in Alberta, but not enough to keep pace with inflation, according to a recent analysis by ATB Financial.

Average weekly earnings in Alberta rose by 3.2 per cent in March, relative to the same time the year before. 

This was a significant bump — and the fastest increase in about five months — but still only about half the province's March inflation rate of 6.5 per cent, the report said.

"Wages, overall, aren't keeping up with inflation," said Rob Roach, the financial institution's deputy chief economist. 

That's both a good and bad thing, Roach said. 

The good news is that because wages aren't increasing as fast as inflation, they aren't driving more inflation, "because, of course, those wage costs often get passed on through to consumers," Roach said. 

The bad news is wage earners end up with less purchasing power overall, which is also tough on retailers, Roach said. 

For their part, employers find themselves in the difficult position of wanting to boost their employees' wages while also facing higher input costs, Roach said. 

"They're in a tough spot," said Roach. 

Camera store, cleaning company give staff a raise

The rising cost of living prompted management at two Calgary businesses to bump up staff starting wages.

Floor sales staff at The Camera Store in the Beltline used to start at $17 an hour but now begins at $18.60, said operations director Julian Ferreira. 

"It is hard-to-impossible to keep up with inflation the way things are going," said Ferreira. "But we figured at least we could help buffer some of that."

The starting wage at Mountain Cleaners Canada used to range from $15 to $18 an hour but is now between $18 and $22 an hour, depending on the position. 

"We have invested in our employees, because we want them to stay and we want them to earn a good wage," said owner Denver Colvin, who said the business has also started to offer signing bonuses. 

Colvin said he's raised prices slightly but has not increased his own take-home pay. He's concerned that customers — themselves squeezed by inflation — will cut back on cleaning services if they feel it's become too expensive. 

"It is a tight one to kind of manoeuvre around," said Colvin, who is also concerned about the rising cost of gas. 

Interest rate increase to 'cool' economy slightly

How are you fighting inflation?

3 years ago

Duration 1:24

Canadians on the streets of Toronto tell the CBC about the changes they're making to their household budgets to make ends meet right now.

Roach believes the solution to the wage-inflation discrepancy is to lower inflation rather than try to bring wages up to match it.

To that end, Roach expects the Bank of Canada will raise interest rates on Wednesday. 

"That should cool the economy a little bit," he said. 

Still, the gap between take-home pay and the cost of living likely won't be resolved any time soon, Roach said. 

"It's going to take time for inflation to come down," he said. 

The ATB report was based on monthly figures released by Statistics Canada.