while some 20 percent remained unemployed for
more than six months. Unemployment was most
likely to affect those with less than eight years of
schooling. The problem was most severe in the At-
lantic provinces, New Brunswick, Nova Scotia, New-
foundland, and Prince Edward Island, where unem-
ployment persisted at double-digit levels throughout
the 1980’s.
While Canada was relatively successful at creating
new jobs, the pay received for those jobs remained
stagnant throughout the 1980’s, which, coupled with
the relatively high rate of inflation, meant that the
incomes of many Canadians actually fell, in contrast
to earlier decades. In 1988, the annual average earn-
ings of a Canadian worker were 29,969 Canadian
dollars ($C), a sum that was in fact less than that
worker had earned ten years earlier. The highest
wages were paid by the mining and oil industries,
but they represented a relatively small part of the
workforce. The lowest wages were paid by the service
industries, which had the greatest number of em-
ployees.
One important factor in the earnings of Cana-
dian workers was the rate of unionization. In 1983,
when the economy was just coming out of recession,
40 percent of Canada’s workforce was unionized,
though most of those workers were employed in the
public sector; 28 percent of private-sector employees
were unionized.
Impact Wages and salaries in Canada are tradition-
ally slightly below those of their U.S. counterparts.
In the 1980’s, this circumstance was made worse by
the fact that the productivity of Canadian workers, at
a dismal 0.2 percent per annum, grew even more
slowly than that of workers south of the border. Ca-
nadian income and wages would continue to lag be-
hind those in the United States until the 2005 oil
boom in Alberta changed the picture.
Further Reading
Bothwell, Robert, Ian Drummond, and John En-
glish.Canada Since 1945. Rev. ed. Toronto: Uni-
versity of Toronto Press, 1989.
Crane, David.The Next Canadian Centur y: Building a
Competitive Economy.Toronto: Stoddart, 1992.
Organization for Economic Cooperation and Devel-
opment.Economic Surveys: Canada.Paris: Author,
annually.
Nancy M. Gordon
See also Business and the economy in Canada;
Canada and the United States; Demographics of
Canada; Inflation in Canada; Unemployment in Can-
ada; Unions.Income and wages in the
United States
Definition Earning and payment of money,
mostly deriving from capital or labor, in the
United StatesWhile hourly wage rates and weekly earnings rose substan-
tially during the 1980’s, they did not keep pace with rising
prices, so real wages actually declined. At the same time,
however, per capita disposable income, adjusted for infla-
tion, increased. Many critics argued that the U.S. indus-
trial economy was being undermined by international com-
petition, reducing the number of good jobs and widening
the inequality of wealth between the nation’s richest and
poorest workers.Between 1980 and 1989, the average weekly earn-
ings of employees in private U.S. nonagricultural in-
dustries increased from $235 to $334. This increase
was not quite enough to keep up with rising prices,
however, so real wages—that is, the purchasing power
of wage income—declined by about 4 percent. The
figures on average yearly wage rates tell a similar
story. Over the decade, labor productivity—that is,
the amount of value created by workers per dollar
spent to employ them—increased by more than 10
percent. As productivity increased, however, real
wages decreased. To a certain extent, these statistics
reflect a lack of reinvestment of profits in the work-
ers producing them. However, they can be mislead-
ing, because they do not take into account fringe
benefits—including medical insurance and pension
contributions—which increased substantially dur-
ing the decade. Moreover, the measured price index
is not always an accurate measure of the real con-
sumer experience of inflation. It may overestimate
inflation by disregarding new and improved prod-
ucts and services, and it may either over- or underes-
timate it by disregarding volatile but essential com-
modities such as oil and food.Household Real Incomes A very different story
from that of U.S. wages in the 1980’s is told by house-
hold disposable incomes of the same period. Ad-The Eighties in America Income and wages in the United States 509