The following is courtesy of Ray Bollman, senior research advisor to theand former chief of the Rural Research Group at Statistics Canada. Here, Mr. Bollman reports on trends related to Canadian farm wages.
Demographic pressures are building within Canada’s labour market and agriculture must address labour shortages to remain competitive and encourage future growth in the sector.
Patterns in the supply and demand for full-time farm workers determine wages paid. And paid wages impact the profitability of farm operations. When comparing wages, two statistics are useful. The average wage and the median wage. The median wage is the wage at which half the working population is paid more, and half the working population is paid less than the median wage. The median wage represents what a ‘middle of the pack’ worker’s wages would be. Comparing these two statistics provide insights into the labour market for agriculture.
Analyzing wages paid to farm employees reveals that:
1. The average wage of farm labour has held its own relative to wages paid in all sectors.
Full-time farm workers received 62.2 per cent of the average wage paid to full-time workers in all sectors of the economy in 1997, and 63.6 per cent of the wages paid to workers in all sectors in 2014. Full-time refers to individuals who work 30 or more hours per week – whether seasonal or year-round employees. The average farm wage maintained a level of 62-63 per cent over the time period.
2. The median wage of farm labour has gained relative to wages paid in all sectors.
The median wage of farm workers was 59.2 per cent of the median wage of all paid labour in 1997, and 68.9 per cent of the wages of all paid labour in 2014. The increase of 9.7 per cent suggests that the wage of the ‘middle of the pack’ farm worker has started to close the gap relative to the overall economy - a definite positive outcome for farm workers.
The median farm wage is increasing more quickly than the average farm wage
After adjusting for inflation, the average wage of farm workers increased by $2.59 from 1997 to 2014. That’s $0.15 per year over the inflation rate. The median wage of farm workers increased $0.18 per year over the same time period.
The median wage is increasing faster than the average wage, which suggests that the labour market is becoming more balanced between high paying and low paying jobs. In other words, the growth in wages is more pronounced at lower end farm jobs than at the higher end.
Farm wages increasing at a faster pace than in the rest of the economy benefit farm workers, while at the same time impact competitiveness of farm operations. Producers should keep an eye on this trend. A comprehensive labour strategy that considers recruitment and hiring, training, retention and compensation goes a long way in solidifying a business’ labour force and mitigating the impact of higher wages on profits.
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Ray D. Bollman, Canadian Agricultural Human Resource Council