Last month, Bank of Canada (BoC) Governor Tiff “T-Mack” Macklem pissed off quite a few people after telling business leaders to avoid adjusting wages to keep up with inflation.
What happened: In response, bosses from Canada’s largest unions are now clapping back, advocating for workers’ bargaining power at a time (they say) they need to make gains.
- Lana Payne, the new president of Unifor (Canada’s largest private sector union), called Macklem’s comments “extremely disappointing,” and Bea Bruske, the president of the Canadian Labour Congress, told Macklem to “stay in his lane.”
The BoC advises against wage increases because of fear of falling into the dreaded wage-price spiral, in which higher wages fuel the inflation fire by leading to higher prices.
Yes, but: Union leaders and policy critics counter this notion, noting that the last wage-price spiral was seen in the early 1980s when far more of the workforce was unionized.
- ~29% of Canada’s working population is unionized, and while their wages have comparatively gone up more this year, they’re still not close to matching inflation.
Why it matters: The BoC is making progress in beating back inflation, but there’s still a long road ahead, and workers can’t afford to take one for the team as living costs continue to rise.