Poloz: Wage trends a positive sign for the job market
Despite some concerns about wage growth in Canada, Bank of Canada Governor Stephen Poloz says trends are pointing in a positive direction.
“This year anyway, we’ve gotten into a higher-churn job market,” Poloz told BNN Bloomberg’s Amanda Lang in Ottawa Wednesday, after the central bank released its latest interest rate decision.
“When I talk to companies, every single one of them says, ‘I can’t find the people that I need.’ That’s actually a good sign because people are shuffling — or churning — through the job market, getting better matches, and wages are going up.”
Poloz’s comments come on the heels of a warning from a prominent CIBC economist who said Canadians’ income levels should be a bigger focus than personal debt levels.
“The debt-to-income ratio is rising not because of the fact that debt is rising to the sky, but because of the fact that income is not rising fast enough,” Benjamin Tal, deputy chief economist at CIBC World Markets, told BNN Bloomberg in an interview earlier this week.
“We’ve been through a lot, people can lose sight of what the past 10 years have been like,” Poloz said. “Especially since we almost got home and then we had the 2015 collapse in oil prices."
“During that period, you get people that would get a job but it’s not the job match that they’d always been hoping for.”
Poloz said getting out of that cycle after a downturn can take years, adding the average wage increase for a person who quits a job, and then gets a new job in the same period, is 12 per cent. He also noted that overall wage numbers have broached the trend line.
“I think signs are starting to accumulate that the hot job market is starting to get to [the] right people,” he said.