According to commentary, wages have so far been suppressed due to high labor force participation rates and the start-stop dynamic of Canada’s economy as a result of lockdowns during the pandemic.
However, Orlando predicts that despite January’s shock, things may be about to change as Canada moves through these challenges this year.
“From our lens, this means that higher incremental growth may be just around the corner. Cyclic indicators are pointing to this result,” Orlando said in the report.
He added that employee hours are increasing and should continue to increase now because the worst of the Omicron effect is back in the past. He also cited the growing number of Canadians leaving their jobs in search of better-paying, full-time work. Compared to the last three business cycles, the proportion of full-time employment has also reached a similar extent.
“This correlates well with the peak unemployment rate and serves to confirm historically that the Canadian labor market has reached full employment. This could further boost wages as full-time workers have less than part-timers.” Workers have more bargaining power than others,” Orlando said.