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Economic Viewpoint

Is the Trend in Wages Different in Europe, the United States and Canada?

March 16, 2022

A growing number of economies have returned to pre-pandemic activity levels. However, the recovery continues to be uneven across countries and sectors, as the global economy has been hampered by new waves of COVID-19 and bottlenecks continue to disrupt the fluidity of supply chains. Coupled with a sustained demand for goods, these obstacles have fuelled inflationary pressures in many sectors, including energy, auto and manufacturing. As mentioned last fall in an Economic Viewpoint, the danger of sharp price increases is that they may cause an inflationary spiral in which inflation spreads across the entire economy and becomes selfsustaining, leading for example to wage inflation. The purpose of this document is to shed light on and compare the wage pressures observed in Europe, the United States and Canada. For the time being, the fastest acceleration in wage growth is occurring in the United States, due in part to a more serious worker severe than in the rest of the West.