MRO Magazine

Blue-collar wages stagnant over past decade

Ottawa, ON -- Hourly earnings of managers, as well as those of professionals employed in business, finance and comp...


Human Resources

March 25, 2008
By MRO Magazine

Ottawa, ON — Hourly earnings of managers, as well as those of professionals employed in business, finance and computer and information systems, increased faster than those of any other occupational groups during the past 10 years, according to a new study by Statistics Canada, ‘Hourly earnings: 1997 to 2007’.

On the other hand, the study reveals, blue-collar workers in manufacturing, clerical employees and salespeople in retail trade saw virtually no growth in earnings.

The study found that between 1997/1998 and 2006/2007, the average hourly earnings of managers employed in the private sector grew a solid 20%. This was four times the average rate of 5% among other private-sector employees.

Hourly earnings of specialist managers — those involved in fields such as engineering, science, information systems, sales and marketing — increased by 23% on average. Those of other managers grew 18%, the same rate for professionals employed in business and finance.

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Computer and information system professionals also enjoyed substantial wage growth, with a 14% increase in hourly earnings.

In contrast, clerical workers and manufacturing employees involved in blue-collar work or supervision tasks saw virtually no wage growth. Nor did cashiers, retail salespersons and sales clerks. Wages stagnated for these workers, who represented 26% of private-sector employment in 2006/2007.

Overall, average hourly earnings of private-sector employees increased 7% during that period.

The faster wage growth of managers was observed in all major industrial groups and in firms of all sizes, as well as in all regions of Canada.

The proportion of workers with a university degree grew more among managers than among other employees. However, this more rapid increase in educational attainment accounted for only 20% of the difference in growth rates of average earnings between managers and other employees.

Furthermore, 75% of the difference in growth rates remained after accounting for differences in industry of employment and region.

The more rapid wage growth experienced by managers over the last decade was a widespread phenomenon in the Canadian economy.

It had a substantial impact on the upper end of earnings distribution.

Between 1997/1998 and 2006/2007, hourly earnings grew 12% among the top 5% of private-sector employees, compared with 4% growth for their counterparts in the middle of the distribution. The study showed that the more rapid earnings growth of managers accounted for between one-third and 60% of this eight-percentage-point difference.

The article “Earnings in the last decade” is in the February 2008 online edition of Perspectives on Labour and Income, Vol. 9, no. 2 (75-001-XWE, free), available from the Publications module at www.statcan.ca.