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March 17, 2005

No Real Gain

Some folks have their minds made up and don't want to be confused by the facts, for the rest the bombardment of election ads is an attempt to take minds off the facts. Most British Columbians are worse off than they were in 2001, and many are no better off than they were in 1991.

Real Wages 1991-2004Statistics Canada has two surveys that measure average weekly wages. The Survey of Payroll employment, Earnings and Hours (SEPH) uses data that employers submit to Revenue Canada, it goes back to 1991. Since 1997 the Labour Force Survey (LFS) has asked a sample of workers what they earn. Economists use the term "real" when the effect of inflation is removed from data by dividing by a price index. The graphs shown here illustrate real wage rates derived by dividing by the Consumer Price Index for BC with the base of 1992 dollars. In 1992 dollars, average weekly wages in BC were $560 in January 1991, $584 in January 1997, $583 in January 2001, and $567 in December 2004. In real terms, families made gains in the 1990s that they then lost in the New Era.

Real Wages 1997-2994Conclusions in economics sometimes depend on which data is used and how it is manipulated. The graph shown here displays both the SEPH and LFS real wage series from January 1997 through December 2004. The SEPH series shows relatively stable average wages from January 1997 through January 2001, and then a decline. The LFS series shows average real wages at $557 in January 1997, $561 in January 2001 and $564 in December 2004. One way or the other, British Columbians are not seeing improved incomes. All of the fancy TV ads on earth, with repetition of a slogan about "working", won't change the reality that families feel in their household budgets.

 

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