Canadian workers’ wages are on the rise. Can they keep pace with inflation?

Wages were on the rise in the back half of 2022, but have yet to catch up with inflation. Economists say that's hurting low-income workers.

Canadian workers faced an uphill battle trying to keep pace with inflation in 2022, jobs figures show, a struggle that experts say forces hard decisions for low-income workers who aren’t making a living wage.

Statistics Canada’s labour report showed Friday that average hourly wages were up 5.1 per cent in December over the previous year.

Though cooler than the 5.6 per cent hike seen in November, Canadian workers marked the end of the year with a seventh straight month of wages growing above the five per cent bar.

But even the strong November growth failed to keep pace with inflation that month, which clocked in at 6.8 per cent annually.

As inflation surged and eventually started to cool through 2022, wage growth steadily crept higher most months, yet never quite matched the pace of price pressures.

Economist who spoke to Global News said that when wages fail to keep pace with inflation, Canadians who aren’t able to find higher-paying employment or negotiate a raise are forced to tighten their belts.

“It’s important to keep in mind that those are real reductions in the purchasing power of workers,” says Iglika Ivanova, senior economist with the Canadian Centre for Policy Alternatives (CCPA) in B.C.

“Especially in this year, with these enormous increases in the cost of living … people earning more modest incomes have really been squeezed, for lack of a better word.”