Labour shortages and other issues have prompted 55% of managers at Canadian businesses to give their employees wage hikes, says a Bank of Canada report.
“Businesses’ most pressing concerns in recent months have been labour shortages, supply chain disruptions and the costs associated with these two challenges,” the Bank wrote in a report called, “Business Leaders’ Pulse: An Online Business Survey,” according to Blacklock’s Reporter
The survey was based on questions issued to managers on a monthly basis in many sectors, ranging from ranchers to factory operators, including those with fewer than 20 employees.
“Across almost all industries, businesses reported labour shortages are causing a loss of sales,” said the survey.
In addition to raising wages, 36% of managers said they were turning away sales, 33% were increasing overtime, 25% were contracting out work, 20% were offering workers bonuses and new benefits, and 15% were reducing minimum qualifications to hire untrained employees.
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In a June 1 report, the labour department said unionized private sector wage gains to date in 2022 were running at 2.3%, the highest average since 2014, while the hospitality industry was seeing average pay gains as much as 3.4%.
“If we were to see wages run substantially ahead of productivity growth, it would become a concern that in that situation, higher wage growth could start to become an independent source of inflation,” Bank Governor Tiff Macklem testified last at the Commons finance committee last April.