Inflation is a “perfect storm” for wage earners, according to an Ontario labour arbitrator. Private sector wage settlements across Canada this year are averaging as high as 3% or more in a bid to catch up with the cost of living..“We consider inflation,” wrote Russell Goodfellow, chair of an Ontario Labour Board of Arbitration. “What was once hoped to be ‘temporary’ is proving stubborn and persistent. It has strongly exceeded the 2% Bank of Canada target since last summer.”.According to Blacklock's Reporter, Goodfellow recommended an incremental 2.5% increase retroactive to 2021 for members of the Ontario Nurses’ Association working at four nursing homes in Greater Toronto. The original “normative” increase was 1.75%..Inflation was putting wage earners under pressure, wrote Goodfellow. “It erodes purchasing power and overwhelms the wage increases typically seen in this sector,” he said. “Add in COVID and it represents something of a perfect storm for these employees. We seek to address it.”.Statistics Canada’s benchmark Consumer Price Index is currently running at 7.6%. The federal labour department estimates private sector wage settlements so far this year have risen as high as 3.4 % on average..Employers facing labour shortages will typically pay 6.1% more this year, according to a July 27 StatsCan report.. More than one in ten employers facing shortages, some 13%, would also “offer signing bonuses or incentives to new employees,” wrote analysts..“Businesses that expected labour shortages at the beginning of 2022 were far more likely to report they would start increasing the wages of new and existing employees,” said StatsCan. More than a third of private sector employers surveyed said they expected labour shortages..Bank of Canada Governor Tiff Macklem has cautioned against rising wage settlements as new fuel for inflation. “It would become a concern that in that situation higher wage growth could start to become an independent source of inflation,” Macklem testified April 25 at the Commons finance committee..“It is something we are watching,” said Macklem. “We do expect wage growth to increase further.”.“Certainly when you talk to companies they’re telling us they are having a hard time attracting workers,” said Macklem. “They are losing workers. They are telling us they’re going to have to increase wages further.”.The central bank since March 2 has raised interest rates on interbank loans from 0.25 to 2.5%. The next adjustment is due for September 7..Due to a high level of spam content being posted in our comment section below, all comments undergo manual approval by a staff member during regular business hours (Monday - Friday). Your patience is appreciated.
