--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-17/why-have-real-wages-lagged-labour-productivity-growth-in-canada/" title: "Why Have Real Wages Lagged Labour Productivity Growth in Canada?" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T07:31:33+00:00" date_modified: "2026-07-13T07:31:33+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2008" ipm_keyword: - "Canada" - "earnings inequality" - "labour productivity" - "labour's share" - "measurement" - "median earnings" - "real wages" - "supplementary labour income" - "terms of trade" ipm_research_theme: - "Labour" ipm_country_focus: - "Canada" - "OECD" - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Why Have Real Wages Lagged Labour Productivity Growth in Canada? Canonical URL: https://csls.ca/ipm-archive/ipm-issue-17/why-have-real-wages-lagged-labour-productivity-growth-in-canada/ # Why Have Real Wages Lagged Labour Productivity Growth in Canada? [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-17-2-Sharpe-Arsenault-Harrison.pdf) Cite this article × Cite this article as: Sharpe, Andrew, Jean-François Arsenault, and Peter Harrison. 2008. “Why Have Real Wages Lagged Labour Productivity Growth in Canada?” International Productivity Monitor, No. 17 (Fall 2008): 16–27. https://www.csls.ca/ipm-archive/ipm-issue-17/why-have-real-wages-lagged-labour-productivity-growth-in-canada/ ## Authors: - Andrew Sharpe Centre for the Study of Living Standards (CSLS) - Jean-François Arsenault Centre for the Study of Living Standards (CSLS) - Peter Harrison Centre for the Study of Living Standards (CSLS) ## IPM Issue 17 Fall 2008 pp. 16–27 ## Related IPM articles [Is the SNA Still Useful? 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The Canadian Experience Tim Sargent Fall 2024 | IPM Issue 47 | pp. 39–53](https://csls.ca/ipm-archive/ipm-issue-47/how-does-industrial-policy-impact-output-hours-and-productivity-the-canadian-experience/) [Accounting for the Decline of Canada’s Real GDP Per Capita since Mid-2022 Philip Smith Spring 2024 | IPM Issue 46 | pp. 83–100](https://csls.ca/ipm-archive/ipm-issue-46/accounting-for-the-decline-of-canadas-real-gdp-per-capita-since-mid-2022/) [IPM Issue 47 Editors’ Overview Andrew Sharpe, Bart van Ark Fall 2024 | IPM Issue 47 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-47/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn The most direct mechanism by which labour productivity affects living standards is through real wages, that is, wages adjusted to reflect the cost of living. Between 1980 and 2005, the median real earnings of Canadians workers stagnated, while labour productivity rose 37 per cent. This article analyzes the reasons for this situation. It identifies four factors of roughly equal importance: rising earning inequalities; falling terms of trade for labour; a decrease in labour’s share of GDP; and measurement issues. T HE MOST DIRECT ROUTE by which labour Le mécanisme le plus direct par lequel la productivité du travail influe sur le niveau de vie est celui des salaires réels, c’est-à-dire les salaires ajustés pour tenir compte du coût de la vie. Entre 1980 et 2005, les gains réels médians des travailleurs canadiens ont stagné, alors que la productivité du travail a progressé de 37 %. Cet article analyse les raisons de cette situation. Il cerne quatre facteurs d’importance à peu près équivalente : la hausse des inégalités de revenus; la détérioration des termes de l’échange du travail; un recul de la part du travail dans le PIB; et des enjeux de mesure. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-17-2-Sharpe-Arsenault-Harrison.pdf)