Wages during the pandemic
Average earnings have gone up, not because the economy is doing well, but because the job losses during the pandemic have been more concentrated among lower-paid employees
By ATB Economics 30 November 2020 1 min read
The average earnings of employees* in Alberta have increased over the course of the pandemic.
As of September, average weekly earnings in the province were up by 2.5 per cent compared to September 2019. Nationally, the average was up by even more—6.9 per cent. (Earnings data have been adjusted to account for seasonal variation.
Wait a minute. Did you say increased? The economy has been tossed around like a rag doll in a hurricane this year, but average earnings are up? What gives?
The explanation is surprisingly simple.
Average earnings have gone up, not because the economy is doing well, but because the job losses that have occurred during the pandemic have, according to Statistics Canada, been “more concentrated among lower-paid employees.” When lower-paid jobs are taken out of the equation, average earnings from employment go up.
This phenomenon is not, however, evenly distributed across Alberta’s economic sectors.
Year-over-year, average weekly earnings were down by 4.4 per cent in the oil and gas sector where job losses have hit head office as well as frontline workers. Manufacturing pay was down by 4.1 per cent and suggests that job losses were not concentrated among lower-paid workers in this sector.
The largest drop in weekly earnings occurred in the “management of companies and enterprises” sector (a.k.a. holding companies). The average earnings of workers in this sector were down by 24.0 per cent compared to September 2019.
The other sectors in Alberta that experienced a year-over-year drop were utilities (-9.7 per cent), real estate, rental and leasing (-0.9 per cent), and accommodation and food services (-1.7 per cent).
Today's trivia question (a new feature): Not including the northern territories, which province had the highest average weekly earnings in Canada in September? See tomorrow's Owl for the answer.
*The wage data are from Statistics Canada’s Survey of Employment, Payrolls and Hours (SEPH). “SEPH provides an account of payroll employment, that is, the number of employees receiving pay or benefits (employment income) during a given month. The survey excludes the self-employed, owners and partners of unincorporated businesses and professional practices, and employees in the agricultural sector.”