Ugh. A study released last year by Deloitte Canada reported that “Canadian output per worker is only 86% of American output.”
What does this mean for the Canadian economy?
Our children will not be as affluent as we are. Not only are we behind, but the gap grows every year. We use the U.S. as a benchmark, but we’re behind other countries as well. And as we continue to slide, the long-term implications for Canadians are very significant. Most income growth in the last decade and more has gone to the top 1% or top .1% of Canadians. Part of the reason for that is because our productivity lags. Productivity is not about people working harder. Productivity is about people producing more per hour worked, which is a different thing. Our problem is not Canadian workers. Canadian workers work as hard, they work as many hours, they are as capable as U.S. or other workers. But we need business to invest in their companies in order to allow those workers to produce more. And we need our workers to accept the fact that that’s actually the key to getting better pay. If you want to fix income disparity, improve productivity. If we don’t do anything about productivity, we’ll go from earning three-quarters of what a U.S. family does for the same work today, to earning half or some other smaller number. The standard of living our children experience will not be what we enjoy.