This is an archive of news stories and research from the National Union of Public and General Employees. Please see our new site - https://nupge.ca - for the most current information. 


Wages unfairly blamed for high inflation

Ottawa (24 Aug. 2022) – Last week, Statistics Canada reported that wage increases were barely two-thirds of the inflation rate. In other words, workers are losing ground.

The figures for July are part of a pattern. In fact, on occasion the increase in inflation has been more than double the increase in wages

Corporate profits rising far faster than inflation 

While wages aren’t keeping pace with inflation, corporate profits are going through the roof. In July, it was reported that, thanks to high fuel costs, oil companies are making record profits. Earlier this summer it was revealed that grocery store chains have been increasing prices by more than inflation to boost profits. 

Supply chain problems contributing to inflation

Problems with supply chains have also had an impact. Thanks to policies that made it easier for corporations to shift manufacturing to low-wage jurisdictions, many of the goods we use are produced on the other side of the world. This means that problems like the Suez Canal being blocked or the Russian invasion of Ukraine can affect both the supply and price of many items we buy.

Labour movement calls out Bank of Canada governor for questionable comments

Unfortunately, statements from the Bank of Canada don’t acknowledge the reality that wage increases are not keeping pace with inflation. In July, the Governor of the Bank of Canada suggested that businesses should try to avoid increasing wages, and the bank’s monetary policy report expressed concern about wage growth. Profiteering by large corporations was not mentioned.

In a letter sent on behalf of the labour movement, Bea Bruske, President of the Canadian Labour Congress, called out the Governor of the Bank of Canada for his comments. She pointed out that the Bank of Canada’s role does not include undermining the collective bargaining power of workers. 

Bea Bruske also questioned why workers were being singled out, “It is hard to imagine a scenario where the Bank of Canada would suggest business owners not pay suppliers, so why advise employers not to pay workers fairly?” As she also pointed out, and as NUPGE members are all too aware, some public sector workers have not had a wage increase in years.

Need to oppose attempts to use inflation as an excuse for undermining collective bargaining

Whenever inflation is high, corporations and their allies will try to use it as an excuse to undermine collective bargaining. Corporations and their political allies regularly try to cap wages, but caps on prices are rare. The Bank of Canada mentioning wages, but not profiteering, is only the most recent example. 

As workers fight to make sure that they don’t see their real wages drop because of inflation, the labour movement needs to be ready to call out attempts to use inflation as an excuse for undermining collective bargaining. When corporations are making record profits, and the consequences of allowing companies to shift production to low-wage jurisdictions are coming home to roost, workers shouldn’t be used as scapegoats for inflation.