Appendix C: A note on hourly earnings

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While annual earnings provides an estimate of the global contribution of an individual to the economy for the year, looking at hourly earnings can also help us to understand how a postsecondary credential is rewarded in the labour market. It could be the case that an individual is working fewer hours at a fairly high wage – thus, while their annual earnings might not be that high, their education is still fairly well-rewarded in the labour market. An example of this type of individual would be someone in pre-retirement who still earns a high wage, but is gradually reducing his or her hours of work.

Table C.1 shows for Ontario (and Table C.2, for Canada) the total population and the college- and university- educated populations, how the annual earnings groups are distributed across five categories of hourly wages, which are defined in relation to the median wages of all workers who were working and who were not self-employed in 2006. These hourly wage categories consist of:

• Those who earn less than half of the median wage (less than $9.60 per hour);
• Those earning half of the median wage to the median wage ($9.60 to $19.20 per hour);
• Those earning more than the median wage to 1.5 times the median wage ($19.21 to $28.80 per hour);
• Those earning more than 1.5 times the median wage to double the median wage ($28.81 to $38.40 per hour); and
• Those earning more than twice the median wage (more than $38.40 per hour).

Table C.1 Percentage distribution of the 25 to 64 year old population by highest level of education attainment, level of earnings and hourly wages, Ontario, 2006

Table C.2 Percentage distribution of the 25 to 64 year old population by highest level of education attainment, level of earnings and hourly wages, Canada, 2006

Among the population with wages, by and large, those who are in low earnings are also earning low hourly wages. In the general population in Ontario, 84% of people with annual earnings at or below half the national median were also in the two lowest hourly earnings categories. Only slightly more than 3% of individuals with low annual earnings were in the highest hourly wage category. These proportions were similar at the Canada level.

Low earning college graduates were also mainly concentrated in the two lowest hourly earnings categories, at 86%. The proportion of low-annual-earnings college graduates with hourly earnings in the top two categories, though small, was higher than for the population as a whole. Again, results were similar at the Canada level.

University graduates do slightly better. In Ontario, only 61% of university graduates with low annual earnings also had low hourly earnings; this percentage was 67% at the Canada level. At the other end of the scale, approximately 10% of university graduates in Ontario (and at the Canada level) with low annual earnings had hourly earnings that were in the top two earnings categories.