Andrew Sharpe () Jean-Francois Arsenault () Peter Harrison ()
Abstract
The most direct mechanism by which labour productivity affects living standards is through real wages, that is, wages adjusted to reflect the cost of living. Between 1980 and 2005, the median real earnings of Canadians workers stagnated, while labour productivity rose 37 per cent. This article analyzes the reasons for this situation. It identifies four factors of roughly equal importance: rising earning inequalities; falling terms of trade for labour; a decrease in labour’s share of GDP; and measurement issues.
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Find related papers by JEL classification: E20 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data) E25 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
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