With the price of essentials like groceries and housing skyrocketing┬аover the last few years,┬аmany have struggled┬аto keep up with the cost of living.
When prices rise faster than wages do, the money people take home effectively decreases because it costs more to buy the same things.
To help people in Canada understand and monitor how inflation has affected the value of their wages, CBC News has created an app (see below).
It uses the consumer price index (CPI) to calculate how much the median wage in a given year would be worth in 2023 when accounting for inflation. This means you can compare wages from different years.
Try the app for yourself to see how the real value of wages for different subsections┬аof people has changed over time┬аand to compare whose wages have increased the most in the last decade. You can hover over or tap the charts for more details.
Methodology
CBC News follows the methodology set out on this┬аpage┬аfor adjusting dollar values for inflation, which Statistics Canada confirms is┬аcorrect.
One assumption of this analysis is that the CPI applies universally to all people. In reality, the index encompasses the prices of many goods and services, some of which may not be equally applicable to everyone.
For example, a price increase for gasoline may affect people who own cars more than those who don’t.
To inform the data analysis, CBC News spoke with Statistics Canada analysts and economists, including Jim Stanford┬аof┬аthe Centre for Future Work and Fabian Lange┬аof┬аMcGill University in Montreal.
About the data
The app uses data from two Statistics Canada tables: one for data around┬аinflation┬аand one for┬аhourly wages in the provinces. It also uses custom data provided by Statistics Canada for Whitehorse, Yellowknife and Iqaluit.
The inflation data comes from the┬аconsumer price index. This is a widely used indicator of inflation that┬аcompares how the price of a set of goods and services has changed over time. The CPI accounts for changes in quantity and size of products тАФ something known as shrinkflation.
The wage data comes from the Labour Force Survey (LFS). This is a well-known Statistics Canada dataset that has been collecting information on wages┬аsince 1997.
Each month, Statistics Canada asks tens of thousands of households to provide information about various labour statistics for the people in their household, including their usual wage rate before taxes and deductions. They are asked to include tips and commissions. The usual hours that a person works is accounted for in the data.
Statistics Canada sometimes does not publish LFS data when there are too few respondents for certain subsets of people. This is done to ensure both confidentiality and a big enough sample size for reliability of the data.
The LFS currently excludes Indigenous people living on reserves. Statistics Canada said this is because many live in remote locations not easily accessible to the survey’s interviewers┬аand because of a short data collection period each month.
People in all other areas are included in┬аthe LFS тАФ meaning First Nations people living off-reserve, M├йtis and Inuit people are included.
