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Corporations – not workers – have been banking the lion’s share of benefits from economic growth
OTTAWA (29 June 2007) – Canadians are working hard to contribute to a growing economy but their pay cheques have been stagnant for 30 years, says a new study by the Canadian Centre for Policy Alternatives (CCPA).
Rising Profit Shares, Falling Wage Shares finds that Canada’s economy grew steadily, with workers’ productivity rising by 51% over the past three decades, yet average real wages have been stuck in a holding pattern throughout.
“Canadians are constantly being told they need to improve their productivity and grow the economy, which is exactly what they’ve done, but their pay cheques aren’t growing to reflect their work effort,” says Ellen Russell, a CCPA senior economist and co-author of the study.
The CCPA research shows that the wage portion of the national income that goes to workers is now at its lowest level in 40 years.
If real wages had increased to reflect improved productivity and economic growth, workers could be earning an average of $10,000 more each year (in 2005 dollars), the study finds.
Instead, corporations – not workers – have been banking the lion’s share of the benefits of economic growth and improved productivity.
“Corporate profit shares are the highest they’ve been in 40 years, and we’re not talking peanuts here,” says Russell. “In 2005, corporations banked $130 billion more in gross profits than they would have had if their profit share had remained at 1991 levels. Sharing those earnings with workers could have gone a long way to reducing Canada’s growing income gap.”
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring that our common wealth is used for the common good. NUPGE
More information:
? CCPA study: Rising Profit Shares, Falling Wage Shares - pdf
? The Growing Gap - Where do I fit?