Figure 14-1 A Century of Change in Canadian Employment
incomes and factor movements. In this chapter, we look specifically at
labour markets. We begin by discussing why some workers get high
wages and others get low wages. We then look beyond our theory of
competitive labour markets to examine situations where either firms or
workers have some market power. We also discuss the effects of
legislated minimum wages, as well as the debate surrounding this
contentious policy. The chapter then discusses labour unions and the
tradeoff they face between increasing their membership and increasing
their members’ wages. Finally, we examine measures of the distribution
of income within a country and discuss the rising income inequality that
is occurring in many countries, including Canada.
Before getting to these topics, however, we can set the stage by
examining the broad patterns of employment in Canada over the past
century, as shown in Figure 14-1. The share of total employment in
agriculture fell from 45 percent in 1891 to just under 2 percent today,
while the share of total employment in services (including government)
increased from 20 percent in 1891 to 80 percent today. The combined
share for manufacturing, construction, and natural resources (forestry,
mining, oil and gas, etc.) has been more stable over the last century, but
has been on a gradual downward trend for the past 50 years, falling from
about 35 percent in 1951 to about 20 percent today.