Bargaining for decent wage increases doesn’t just give workers, families and communities a boost. It also drives a strong economy. Household spending, which relies on healthy wages, has been a main driver of economic growth since the 2008 recession. But that’s changing.
Stagnant wages are affecting the economy. In January, the Bank of Canada pressed ‘pause’ on an interest rate hike, thanks to weaker-than-expected consumer spending and housing investment.
When the Bank increases interest rates, the cost of borrowing for consumer spending and housing grows. Since Canadians owe nearly $1.78 for every dollar of disposable income, the situation is becoming unsustainable without increases in wages.