An article from
Source G. Kohler
Date 05/01/26/23:54

Wednesday, Jan 26, 2005

Firms fend off global competition with lower wages: Statscan

Globe and Mail Update

NEW EMPLOYEES ARE EARNING less than their counterparts two decades ago, a trend that a new report says may be caused by the surge in temporary positions.

But researchers did not find solid evidence to substantiate fears that well-paying jobs have been fleeing the country. Instead, Statistics Canada spokesman René Morisette said that firms seem to be meeting the overseas challenge by lowering wages at the entry level.

Men have fared the worst, according to Wednesday's report - Are Good Jobs Disappearing in Canada? - from Statistics Canada, their inflation-adjusted wages sagging 13 per cent between 1981 and 2004. The trend was seen across all categories, though it was strongest among young men and those without a university education.

The report raises the possibility that a boom in temporary jobs has fuelled the entry-level wage decline, noting that the number of new employees taking temp jobs has roughly doubled during that same period.

"The widespread nature of the decline of wages among new employees ... seems to represent a change in the way firms view wages," Mr. Morisette told from Ottawa.

"Firms have sought greater flexibility by offering lower wages to new employees and by changing the nature of the relationship of the workplace, going with more temporary jobs."

Although wages across the overall job market have remained largely stable since the early 1980s, the report shows that the wages of almost every category of new employee, defined as a person who has been with a company less than two years, have dropped dramatically during that same time. This decline was offset by moderate gains among more seasoned employees.

"Falling wages for new employees, rising wages for employees with seniority," Mr. Morisette said. "So, overall, little change."

The only group of new employees to buck the wage trend of was 25- to 35-year-old women, who registered a 3-per-cent rise in their wages during the past two decades. All other age- and education-categories of both men and women experienced declining wages.

The rest of the work force experienced fairly stable wages, measured in 2001 dollars.

The portion of people earning less than $10 an hour dropped 1.5 points to 15.7 per cent while the portion earning more than $30 climbed by nearly twice as much, rising 2.9 points to 11.4 per cent. The number of people earning between $10 and $30 an hour remained within a similarly tight range.

Along with their diminished earning power, new employees are also about only half as likely to secure a unionized job as their counterparts two decades ago.

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