Study: Trends in employment and wages

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Between 2002 and 2007, the manufacturing industry in Canada saw a decline of 241,000 workers. Despite this decrease in factory employment, overall employment and earnings grew between 2002 and 2007, as the average hourly pay, adjusted for inflation, increased by 3.7%.

Manufacturers in Central Canada bore the brunt of the manufacturing employment declines, with factory job losses in Ontario concentrated in motor vehicles, while losses in Quebec were mainly in the textile mills and clothing manufacturing sectors. By 2007, manufacturing made up 12% of total employment in Canada, down from 15% in 2002.

The shift from manufacturing employment to other parts of the economy has raised some questions about the impact on wages. Overall earnings grew between 2002 and 2007, despite the large declines in manufacturing. This increase in real earnings may be attributed to a number of factors.

First, occupations at the high end of the pay scale, such as other management in business, finance or government and natural and applied sciences, saw big employment increases over this period. Overall, employment increases from 2002 to 2007 were skewed toward the upper end of the pay scale, as workers in the highest pay ranges saw the largest increase in their numbers.

Furthermore, in Ontario, manufacturing losses were more predominant in the mid-pay range, while in Quebec the losses were split evenly between the low and mid-ranges. This does not mean, however, that displaced factory workers did not endure hardships in adjusting to the restructuring. While high-paying work was being created in other sectors of the economy, ex-manufacturing workers were not necessarily hired into these positions.

Finally, wage growth was not distributed uniformly across the country and Alberta's employment boom and run-up in wages played a part in pushing up the national average.

Note: Today's release, "Trends in employment and wages, 2002 to 2007," uses various data sources to look at trends in employment and wages by industry and occupation groups. This article also provides an overview of non-wage benefits such as work arrangements and skills development and training by industry in 2005.

This article, published in Perspectives on Labour and Income, uses data from the Labour Force Survey to document trends in employment and pay by broad industry and occupation groups. More detailed industry breakdowns are provided by the Survey of Employment, Payrolls and Hours, the Workplace and Employee Survey and the 2006 Census.

Definitions, data sources and methods: survey numbers, including related surveys, 2612, 2615 and 3701.

The article "Trends in employment and wages, 2002 to 2007" is now available in the September 2008 online edition of Perspectives on Labour and Income, Vol. 9, no. 9 (75-001-XWE, free), from the Publications module of our website.

For more information, or to enquire about the concepts, methods or data quality of this article, contact Jane Lin (613-951-9691; jane.lin@statcan.gc.ca), Labour Statistics Division.