Average hourly wage in province approaches Canadian average

Daniel MacEachern dmaceachern@thetelegram.com
Published on November 17, 2011
Memorial University economist Wade Locke says continued labour pressures will push Newfoundland and Labrador's average hourly wage until it has surpassed the Canadian average and is comparable to Alberta's.- Photo by Dan MacEachern/The Telegram

Newfoundland and Labrador's average hourly wage will soon surpass the Canadian average, says a Memorial University economist.

Speaking to the Newfoundland and Labrador Employers' Council conference on the province's looming labour shortage, Wade Locke said the province's average hourly wage has quickly closed the gap with the national average.

"There's been a huge change in people's incomes since about 2005, 2006," he said, attributing the increase to growth in the oil industry as well as the public sector. "Things are happening, and they're going to happen more in the future."

Five years ago, the province's average hourly wage was 80.9 per cent of the Canadian average. By last month, workers in Newfoundland and Labrador were paid an average of $22.72 an hour, 98.5 per cent of the $23.06 national average.

"That's going to get a lot worse," he said. "I don't know if 'worse' is the right word, but it's going to get different. I'm expecting to see that this number will start to go up even faster than you're seeing now." Locke added he expects wages in Newfoundland and Labrador to continue rising until they're competitive with Alberta's.

The reason, said Locke, is the province's competition with major projects in other provinces - including projects that weren't factored into the government's forecast earlier this year that there will be 77,000 job vacancies in Newfoundland and Labrador by 2010. Many of those job openings will be due to retirements in an aging workforce, but higher wages may see workers postpone their retirements.

"The problem is that these wage inflations will be driven by the fact that we have to compete with Alberta ... which is expecting to double or triple oilsands production," he said. Projects will be competing for labour in British Columbia, Saskatchewan and - with the recent announcement of a $25-billion contract for Irving Shipbuilding in Halifax - with Nova Scotia.

"While we might get a chance to supply them with services ... they will suck labour out of this place as well. It's the same kind of labour," he said.

dmaceachern@thetelegram.com Twitter: TelegramDaniel