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Wages expected to go up, but workers' spending power could still drop after inflation

Last Updated Sep 15, 2021 at 10:21 am MDT

FILE - In this Feb. 6, 2021 file photo, a woman walks past a "Now Hiring" sign displayed at a CD One Price Cleaners in Schaumburg, Ill. In a stark sign of the economic inequality that has marked the pandemic recession and recovery, Americans as a whole are now earning the same amount of wages and salaries that they did before the pandemic struck, even with nearly 9 million fewer people at work. (AP Photo/Nam Y. Huh, File)

TORONTO — A new survey says wages are going up in Canada, with employers projecting an average annual pay increase of 2.5 per cent for next year.

When excluding organizations that are planning salary freezes, the poll found average salaries are expected to rise 2.7 per cent in 2022.

The LifeWorks survey demonstrates growing confidence in the country’s economic outlook compared with last year’s projection, when employers forecasted an increase of 1.9 per cent including freezes.

Still, the salary estimates fall below Canada’s rising inflation rate, which could leave workers with less spending power despite wage hikes.

Statistics Canada says the consumer price index in August rose 4.1 per cent compared with a year ago — the largest year-over-year inflation increase since March 2003.

Meanwhile, the highest wage increases are expected in the wholesale trade industry, where average salaries excluding freezes are expected to climb 3.1 per cent, followed by three per cent wage increases projected in the construction, accommodation and food services, and information technology sectors.

This report by The Canadian Press was first published Sept. 15, 2021.

The Canadian Press