Most Canadians are unhappy with their salaries and more than half plan to ask for a raise in 2019, a new survey has found.
Conducted by Censuswide on behalf of job site Indeed Canada, the research found that only 13 per cent of Canadian workers surveyed are comfortable with their current rate of pay. That’s down from 17 per cent from when Indeed commissioned the same survey one year ago.
The decline in salary satisfaction will prompt 53 per cent of respondents to ask for more pay this year, the survey found.
The online survey of 1,000 randomly selected employed Canadians was conducted between Jan. 8 and Jan.16 of this year.
Canada is in a period of record-low unemployment. Although there are still some sectors and regions where it can be challenging to find good work, the jobless rate hit a 40-year low of 5. 6 per cent in November, and has continued to fall since then.
Statistics Canada released its latest job numbers on Friday, showing that the Canadian economy added another 56,000 jobs in February, far outperforming expectations of economists. Paired with growth in January, the numbers represent the highest-growth two-month period in the labour market since 2012 — although most of those new jobs were in Ontario.
“I think there is an opportunity, if you’re in a high-demand area like tech, to demand a higher wage, because there isn’t enough top talent in that space in Canada,” said Jodi Kasten, managing director of Indeed Canada.
Friday’s job market data shows that wages have grown by 2.3 per cent in the year ending in February, an improvement from the 1.8 per cent annual pace reported in January. But overall, they’ve barely kept pace with inflation throughout the job boom of recent months.
Respondents to the Indeed survey said that, on average, they last received a pay raise approximately a year and a half ago; 14 per cent said their pay has never changed.
The survey found that most Canadians would like to earn, on average, $12,000 more per year, Kasten said.
“As prices increase and the cost of living — especially housing in major city centres — goes up, I think we can attribute it to that.”
Millennials were more likely to want a raise, with 58 per cent of those age 25 to 34 saying they plan to ask for a pay increase in 2019.
Kasten said this is likely because people in this age group graduated from university or college more recently, tend to hold starting positions with relatively lower salaries, and are grappling with both student debt and high housing costs.
The research found that men are more likely to ask for bigger raises than women. Of those who plan to ask for a raise, 44 per cent of male respondents said they’d ask for an increase of between six and 10 per cent while only 35 per cent of women will ask for that much. Most women who want a raise — 59 per cent — said they would ask for no more than five per cent.
‘No clear smoking gun’
Economist Tony Bonen, director of research, data and analytics with the Labour Market Information Council (LMIC), a non-profit research institute in Ottawa, says the slow wage growth is “a bit of a puzzle that everybody’s trying to make sense of.”
Given that unemployment is at a “historic low,” standard economic theory would suggest a correspondingly tight labour market, causing employers to increase wages faster than they would otherwise, Bonen said.
“But that doesn’t seem to be happening — at least, not to the extent that the low unemployment rate would suggest that it should. So we’re kind of in a different world than we’ve seen in, say, the ’80s or ’90s,” he said.
“The challenge is that there’s no clear smoking gun [showing] why wages haven’t been increasing more rapidly.”
Likely contributing to the phenomenon are global market whims, such as the slower growth of China’s economy after years of blockbuster performance, Bonen said.
“They’re such a big part of global manufacturing, this has knock-on effects elsewhere.”
Compared to the U.S., Canada also has slower job churn, the rate at which people leave their current job or employer for a new one, Bonen said.
An aging workforce is also dampening average wage growth, he said.
“The baby boomer generation has already begun to enter retirement, so this means people who typically are earning more money later in their career are leaving the job market and being replaced by people at an earlier stage.”
There’s no one lever policymakers can pull to boost wages. Excluding around 15 per cent of Canadians who are self-employed, 40 per cent of Canadians work for small companies that employ fewer than 100 people, said Bonen.
As Indeed’s Jodi Kasten said, these companies may not have a lot of flexibility to increase paycheques.
“Companies only have so much money to go around, and sometimes, they have a choice of giving extra-rich merit increases or adding [to the] head count, and, typically, more head count means more revenue,” said Kasten.
Those who plan to ask for a raise would be wise to plan ahead and to be prepared to discuss the matter with managers in advance of the performance-review cycle, she said. Next, they should make a list of things they’ve accomplished since their last pay increase, such as taking on more responsibilities and projects, or getting new business leads.
“The more metrics you can assign to it, the better,” said Kasten.
Knowing how your salary stacks up against others in your field also helps, said Bonen. Recent research by the LMIC into the kind of labour-market insights Canadians feel they need, whether they’re employed or not, found that better wage data topped the list.
This story originally appeared on CBC