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Balancing wages with inflation

Inflation is a persistent force in any economy, constantly eroding the purchasing power of currency over time. Canada is no exception, and as prices for goods and services rise, the value of money diminishes and makes it important for individuals to receive regular raises that keep up with the increasing cost of living. Raises play a vital role in maintaining the standard of living for workers, ensuring that their wages remain aligned with the rate of inflation. Without periodic increases in income, individuals may find themselves struggling to afford basic necessities, leading to financial strain and reduced quality of life.

One of the leading issues around affordability is for minimum wage workers – while many provinces have taken steps to raise minimum wage levels, the efforts have not been nation-wide and fail to align with the increasing costs of living across the country. As prices for essentials such as housing, food, and transportation continue to rise, many low-wage workers struggle to make ends meet. By raising the minimum wage, there is an opportunity to ensure that workers are able to afford basic necessities of life and maintain a decent standard of living. This can also help reduce income inequality and stimulate economic growth by putting more money into the hands of those who are likely to spend it in their local communities.

There is a very valid argument that wage increases put further strain on struggling businesses, especially with the current economy, but this is where the government has the ability to step in. With the capacity to subsidize wages and direct financial support straight to Canadian workers, the government can ensure that individuals can afford essentials and maintain a decent standard of living, ultimately fostering economic stability and prosperity within our own nation.

A new survey has revealed that more than half (57 percent) of Canadian employees would be happier at work if they received a raise. Conducted by ADP Canada Co., the survey gathered opinions from over 1,200 employees and indicated that approximately one-third (35 percent) would feel more content with a bonus, while 31 percent believed additional vacation days or time off would boost their overall work satisfaction.

Recent data also shows a slight dip in employee happiness, from an average score of 6.7 in February to 6.6 in March – this number has been declining consistently since the pandemic in 2020. Currently, only about 43 percent of surveyed employees feel satisfied with their roles and responsibilities. Work-life balance remains the highest contributor to employee happiness, though it has decreased slightly from 6.9 to 6.7 out of 10 between February and March. Following closely are recognition and support with a happiness score of 6.5, then compensation and benefits at 6.1, and career advancement opportunities at 6.0. Baby boomers continue to be the happiest generation for the 15th consecutive month, scoring 7.2 out of 10, while millennials are now the least happy at work, with a score of 6.5. Generation X and Z employees are closely matched with scores of 6.6 each.

According to ADP, compensation remains a top concern for workers nationwide as the constant inflation has dented the happiness levels of employees over recent years. Employers need to follow transparent pay structures, clear communication, and regular check-ins with employees to help them feel secure and confident in their current roles.

Raises are also essential for maintaining morale and employee satisfaction within organizations. Employees who feel valued and fairly compensated for their work are likely to be more engaged, productive, and loyal to their employers. On the other hand, stagnant wages can lead to dissatisfaction, resentment, and even conflict among workers. By offering higher minimum wages, regular raises, and programs like performance-based bonuses, the government along with employers are able to demonstrate their commitment to recognizing the contributions of the workforce while fostering a more positive work environment. This, in turn, can lead to higher levels of employee retention which goes hand-in-hand with organizational stability and widespread economic success in the long run.

Putting money back in the hands of everyday Canadians is one of the most important factors. While fulfilling commitments to other countries is important, Canada often goes above and beyond those commitments to help beyond borders while budgets seem to forget working class citizens that are struggling within. Instead of spreading Canadian funds internationally, isn’t it more crucial to prioritize putting money back in the hands of hardworking Canadians who need it most?

Survey Source: Benefits Canada