--- canonical_url: "https://csls.ca/research/labour-productivity-and-the-distribution-of-real-earnings-in-canada-1976-to-2014/" title: "Labour Productivity and the Distribution of Real Earnings in Canada, 1976 to 2014" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-02T12:48:53+00:00" date_modified: "2026-07-02T12:48:53+00:00" post_type: "research" summary: "" post_tag: - "Canada" - "earnings decomposition" - "income distribution" - "inequality" - "labour productivity" - "labour share" - "middle class" - "real earnings" - "wage gap" country_focus: - "Canada" province_region: - "National" research_theme: - "Labour Markets" - "Productivity and Economic Measurement" featured_image: "https://csls.ca/wp-content/uploads/2026/07/old-reports_hero_banner_bg.webp" status: "publish" --- # Labour Productivity and the Distribution of Real Earnings in Canada, 1976 to 2014 Canonical URL: https://csls.ca/research/labour-productivity-and-the-distribution-of-real-earnings-in-canada-1976-to-2014/ # Labour Productivity and the Distribution of Real Earnings in Canada, 1976 to 2014 [Download full PDF report](https://csls.ca/pdf/csls2016-15-1.pdf) Cite this report × Cite this report as: Uguccioni, James, Andrew Sharpe, and Alexander Murray. 2016. “Labour Productivity and the Distribution of Real Earnings in Canada, 1976 to 2014.” CSLS Research Report 2016-15. Ottawa: Centre for the Study of Living Standards. https://csls.ca/research/labour-productivity-and-the-distribution-of-real-earnings-in-canada-1976-to-2014/ ## Authors: - James Uguccioni Centre for the Study of Living Standards (CSLS) - Andrew Sharpe Centre for the Study of Living Standards (CSLS) - Alexander Murray Centre for the Study of Living Standards (CSLS) ## Report 2016-15 November 2016 45 pages ## Related research [Measuring the Appropriate Outcomes for Better Decision-Making: A Framework to Guide the Analysis of Health Policy Matthew Calver March 2016 | Report 2016-03 | 132 pages](https://csls.ca/research/measuring-the-appropriate-outcomes-for-better-decision-making-a-framework-to-guide-the-analysis-of-health-policy-2016-03/) [Living Standards Domain of the Canadian Index of Wellbeing Andrew Sharpe, Christopher Ross November 2011 | Report 2011-17 | 124 pages](https://csls.ca/research/living-standards-domain-of-the-canadian-index-of-wellbeing-2011-17/) [Productivity: Key to Economic Success Centre for the Study of Living Standards (CSLS) March 1998 | Report 1998-01 | 99 pages](https://csls.ca/research/productivity-key-to-economic-success/) [Productivity Trends: A Canada-U.S. Comparison Centre for the Study of Living Standards (CSLS) January 1999 | Report 1999-01 | 6 pages](https://csls.ca/research/productivity-trends-a-canada-u-s-comparison/) [New Estimates of Manufacturing Productivity Growth for Canada and the United States Andrew Sharpe March 1999 | Report 1999-02 | 21 pages](https://csls.ca/research/new-estimates-of-manufacturing-productivity-growth-for-canada-and-the-united-states/) [Apprenticeship in Canada: A Training System Under Siege? 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Indeed, between 1976 and 2014, median real hourly earnings grew by only 0.09 per cent per year, compared to labour productivity growth of 1.12 per cent per year. We decompose this 1.03 percentage-point growth gap into four components: rising earnings inequality; changes in employer contributions to social insurance programs; rising relative prices for consumer goods, which reduces workers’ purchasing power; and a decline in labour’s share of aggregate income. Our main result is that rising earnings inequality accounts for half the 1.03 percentagepoint gap, with a decline in labour’s income share and a deterioration of labour’s purchasing power accounting for the remaining half. Employer social contributions played no role. Further analysis of the inequality component reveals that real wage growth in recent decades has been fastest at the top and at the bottom of the earnings distribution, with relative stagnation in the middle. Our findings are consistent with a ‘hollowing out of the middle’ story, rather than a ‘super-rich pulling away from everyone else’ story. La main-d’œuvre canadienne est plus productive que jamais, mais un sentiment généralisé persiste chez les Canadiens selon lequel le niveau de vie de la « classe moyenne » stagne. En effet, entre 1976 et 2014, le salaire horaire réel médian n’a augmenté que de 0,09 % par année, comparativement à une croissance de la productivité du travail de 1,12 % par année. Nous décomposons cet écart de croissance de 1,03 point de pourcentage en quatre composantes : la hausse de l’inégalité salariale; les variations des cotisations des employeurs aux programmes d’assurance sociale; la hausse des prix relatifs des biens de consommation, qui réduit le pouvoir d’achat des travailleurs; et un recul de la part du travail dans le revenu global. Notre principal résultat est que la hausse de l’inégalité salariale explique la moitié de l’écart de 1,03 point de pourcentage, le recul de la part du revenu du travail et la détérioration du pouvoir d’achat des travailleurs expliquant l’autre moitié. Les cotisations sociales des employeurs n’ont joué aucun rôle. Une analyse plus poussée de la composante d’inégalité révèle que la croissance des salaires réels au cours des dernières décennies a été la plus rapide au sommet et au bas de la répartition des salaires, avec une stagnation relative au milieu. Nos constats concordent avec une explication de type « évidement du milieu » plutôt qu’avec une explication où les « très riches se détachent du reste ». [Download full PDF report](https://csls.ca/pdf/csls2016-15-1.pdf)