Pandemic fuels income gap growth as high-wage jobs surge

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Pandemic fuels income gap growth as high-wage jobs surge

Canada’s income gap is growing as the recovery of the labour market plays out very differently from past recessions: high-wage jobs appear to be thriving in the pandemic.

Over the past year, there has been a net increase of nearly 350,000 people employed in the top half of wages, making at least $27.82 an hour, CIBC Capital Markets said Tuesday in a report. And job creation is clustering near the top: Around 260,000 positions have been added in the highest wage quartile of at least $41.73 an hour.

At the other end, there’s been a net loss of 740,000 employees in the bottom half of hourly wages, an outcome more typical of recessions. (CIBC’s report focuses on company employees and excludes the self-employed.) For those in the bottom quartile, earning less than $13.91 an hour, employment has dropped by 22 per cent.

“The lower the pay grade, the worse the job market performance is,” wrote deputy chief economist Benjamin Tal, noting it is “an anomaly” for high-wage positions to increase in a recession.

“It’s a tale of two economies,” Mr. Tal said in an interview. “Every crisis is a trend accelerator. And clearly, the trend of widening income gaps was there” before the pandemic.

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