Discussions

Please explain to me like I’m five-  
 
Why have wages not increased in 5 years but things like those listed below have:  
 
- rentals (one example a 875$ place 5 years ago now 1375$),  
- clothes (jeans 35$-68$ sane brand),  
- food (one buffet 8$-17$),  
- health insurance (88$-325$ with no claims),  
- school courses (224$ 13 years ago and 1275$ now)  
 
Other things have increased in price (housing, cars, hygiene products) but why haven’t wages matched the gap?

Don't know the answer to your question. But also MPI (autopac), hydro rates, bell mts, and shaw rates have all gone up as well just to name a few more.

Households have 2 cell phones @$45/month, high speed internet at $45-$80/month, cable at $90-$200/month, newer vehicles in the driveway...kids all have Northface/Columbia winter gear, NIKE shoes/Sorel boots...I've never seen so many new pontoons/$15,000 watercrafts, boats with 4 stroke outboards.  
 
Somehow we've all managed to live greatly improved lives yet wages are no better than they were in the 80's when we had Zero internet, there might have been 20 people with a boat at the lake and they were used and not pontoons, etc etc. Is that the question? How have we managed to live these greatly improved lives without the corresponding wage increase (which I disagree with but don't see any point arguing)?  
 
I often think about the good old days of trying to buy a 19 inch tv for the cost of 52 inch flat screen today while making $3.75/hour while paying 19% intrest on a mortgage and wish I could go back to those glorius days of plenty. Where Nike shoes and Columbia calibre clothing was something maybe 1 family in town could afford...and even they weren't buying it for their 3 year olds.

"Why have wages not increased in 5 years but things like those listed below have:"  
 
I'm pretty confident that there are a lot of people that are able to tell you that their wages have increased in the last 5 years. Perhaps the question you are asking is why haven't you seen a wage increase in the last 5 years. At this point you alone have the information needed to understand why.  
 
When I was young I was taught that when I became an adult it would be up to me to make sure I could provide for myself. I was fortunate in that my parents gave me the tools I needed, along with a good example to follow, to allow this happen.  
 
Not everyone's circumstances are the same. Some people can't (or won't) make the changes they need to along the way to keep up with the world and the way things change, but ultimately, that responsibility belongs to the individual.  
 
This might not be what you want to hear, but that's the way I see it.

fargobob said ""Why have wages not increased in 5 years but things like those listed below have:"     I'm pretty confident that there are a lot of people that are able to tell you that their wages have increased in the last 5 years. Perhaps the question you are asking is why haven't you seen a wage increase in the last 5 years. At this point you alone have the information needed to understand why.     When I was young I was taught that when I became an adult it would be up to me to make sure I could provide for myself. I was fortunate in that my parents gave me the tools I needed, along with a good example to follow, to allow this happen.     Not everyone's circumstances are the same. Some people can't (or won't) make the changes they need to along the way to keep up with the world and the way things change, but ultimately, that responsibility belongs to the individual.     This might not be what you want to hear, but that's the way I see it. "

Good answer.

The problem is not that wages aren't increasing, they just aren't increasing at the same rate as the cost of living. Ie. Our fist house doubled in cost in the seven years we lived in it, but our wages did not go up the same amount. I feel sorry for people just starting out now because entry level wages even in professional careers haven't kept up with the cost of living. I knew lawyers 20 years ago that could afford to build a brand new house on their articling salary. That would not even close to happen now. Same profession, same hard work put in to getting there, but there ends up being more students debt coupled with higher cost of living which leaves them with less options than 20 years ago.  
The cost of living has become ridiculous, but what we think is absolutely necessary in life also has become a bit out of control.

People have to look at themselves first before pointing the blame. How many tv's do you have. How many cell phones. Do you really need the unlimited everything contract for your phone's. Do you have cable. How many packages do you have that you don't use. How many tablets laptops and electronics do you really need.  
 
Your cost of living is depending on your life style and majority of this city lives way above their needs.

I agree with you there ... we too have everything we need and more .Dont need nothing else that’s for sure!! Lol

Wages may have not increased since the cost of living has increased but those people that seem to be doing so well are likely living with more debt.

I can understand times are hard and things are not always easy. If you have trouble living off minimum wage do something to get into a job that pays better. Loads of jobs out there pay beyond minimum wage and don't require pricy or any education.  
My point being, if you feel you need to make more money, go make more money. Hell get a second or third job if you like.

Have increased wages. When I started work in late 1981 I was making 7.65 per hour. Now the start g wage for that same job is. $16.97 per hour. At the end of 5 years that job pays $19.83. Happily I have been promoted a few times and am now making over 4x what I started at all those years ago. I would be in dire straits if I were still making only $7.65 an hour. It would.be worse if I were maki g only the $2.70 an hour I made at the fast food restaurant in 1979

Another factor to consider is every year the percentage of dual-income households rises, along with fewer children.  
Much more disposable income for (many of) these families, even when compared to rising living costs.

all children are a blessing but I see way to many people have way to many children than they can afford. If you cant afford 5 kids don't have 5 kids. Even two kids, if you can afford two don't have 2. Birth control is far cheaper than children. And if you can afford the birth control you most defiantly cannot afford the child.

Why do folks have more now when wages aren't keeping up with inflation? Answer: easy access to debt. Canada is on the verge of a personal debt crisis.

It's interesting to me that people seem to assume that if someone's wages have not increased, it is because they're working a minimum wage job. That's not the case at all.  
 
First of all, yes the cost of living has increased. This is due to a lot of factors. But it's important to understand that inflation is an economic principle specifically designed to get people to spend money and stimulate an economy. If you research the history of inflation you will see that the basic idea was "If people know that $1.00 will go further today than it will in a year, people will be less likely to wait to pay for products or services, because it'll cost them more money later." Admittedly, this construct has generally served society well. (There is a lot more to it than that, but this is the easiest and simplest method to explain in an internet forum).  
 
As a result, cost of living will always go up.  
 
However, this does not at all guarantee cost of living increases.  
 
I once knew a very intelligent person who said "Any decent employer should give a good employee a raise each year to match the cost of living". And while this was a very intelligent person, it was a very narrow-viewed statement.  
 
It assumes that as the cost of living has increased, so has an employer's profits, and therefor their ability to increase wages.  
 
Example: I worked at a company where in the first two years my salary doubled. A good employer. However in the last 3 years i was there, my salary stayed the same. During my performance interviews it was pretty clear that the issue was neither my performance. My employer would remark that he really wished he could afford to give me an increase but just could not afford it and keep his business profitable.  
 
 
Reality 1: As cost of living increases, so do the expenses that a business has to pay. If the business is not also able to increase their revenue in that time, their ability to pay their employees more is hampered.  
 
Reality 2: A business exists to be profitable. That is it's primary function. To make money. As such, an employer is not always incentivised to give wage increases.  
 
One argument to this is that any good business wants to hold onto their people and will pay them to keep them happy and prevent them from looking elsewhere. A counter-argument however is that this is entirely based on the economy, the industry and the location of the business. If the business doesn't need to give you a raise to keep you, why would they? This sounds cold but it's simple economics.  
 
Reality 3: It's very frustrating to me when people say things like "Just get a better job." or "It's your own fault you struggle financially." In my experience these tend to be people who have not been put into a position where getting an education was very difficult or near impossible. Or haven't been in situations where they began making all the right decisions when a personal injury, tragedy in the family, or other unforeseen circumstance derailed their life plans.  
 
I think people generally do not set out to be poor. But if your minimum wage job is the only thing allowing you to pay the rent, it is very difficult to quit and get an education. People who have never had to live in really financially tight situations do not seem to realise how much harder, and how many less options are available to someone who has even a little bit more money, or even better, help from family or friends.  
 
There is a really good article called 5 Things Nobody Tells You About Being Poor on Cracked. I know it's a comedy website, but the article itself is really interesting (Language warning).  
 
Anyway, I post this because comments blaming the OP for their situation, or making sweeping generalisations are really uneducated and show utter ignorance.  
 
Now that said. There were some good points here. For instance, if the OP does happen to have a minimum wage job, then @fomo's comment about higher paying jobs being available was a great one.  
 
Additionally there was a comment about people who seem to be living well are likely living in more debt. I think that this is a very accurate statement and the numbers seem to back it up, as Canadians currently carry the largest household debt (adjusted for inflation) in Canadian history.  
 
That said there was another comment about people having too many phones or tablets or tv's... that comment did nothing but make sweeping assumptions regarding the OP. The OP simply asked why wages do not seem to increase with the cost of living. And for many people that can absolutely be the case.  
 
It seems like for a lot of people on here, they just used this as an excuse to complain and criticise. That's really unfortunate, because I'm sure it did nothing to help the OP.

if you have Netflix or can stream it.  
"Inequality for All"  
http://www.imdb.com/title/tt2215151/  
 
Ron Reich is a advocate for the working man. He worked with Clinton administration to help raise awareness of the country's widening economic gap.  
He mentions on a scale where living costs are soaring, but the wages have stayed (basically) the same for 20 years. Canada is very similar.  
 
By the way, I agree to the comments just above ^ by this poster about the three realities. Very logical response.

Try living on $10k a year. With a budget of $67 for food a month, with pharamacare $800 in meds a year, a car (needed because of disability) and credit card payments (worked previous) and rent.. when normal rent is $800 a month if your lucky.

Yes some pres:criptions are paid, these are the one that are not. If they didn't it would be over $7,000 a year. That is why I have credit card debt. I lost my job because of my disability (long story) and had to use my card to by medication before eliable. The food tamper is hard when have food sensitivity and have to be on a specific doctors diet. I actually don't have cable, I just can't afford it so I just go with out. A lot of the stuff that was listed above I do go without. I just try to get by on day at a time. I am trying to get a job with my previous career as I know I can do it with my disability but I just haven't had any luck finding a job.  
 
As you can tell I am not in it for being lazy I have been working hard to reach a goal in order to have surgery that would help. I am frustrated that I haven't been able to work.

living is costly now wait until the full effect of the carbon tax takes hold! We ain't seen nothing yet!

When costs of living are figured out averages are used, and regional conditions can affect exactly how people are doing in a certain area. Since I work privately I wonder about what happens when minimum wages go up, over the last few years minimum wages have increased, in an effort to keep people in the game. When they are figuring costs do they take into account that with some food items the price might be rising at the cost of living but the amount of product you receive is getting smaller.  
 
I look at personal finance the same way I look at business, yes you can change, you can downscale, you can try and get debt costs under control, but look at the business world, even with all the changes that business makes, businesses do close down or go broke, at a personal level being forced to that point isn''t a good thing. Just this morning ToysRus is gone.  
 
Final thought on the personal side. There was the comment on meat prices, as a producer  
I will mention that in 1979( read that date) I received a little plague from then CKX radio for the top selling package of slaughter cattle for the week, the price I received was 81.1 cents per pound. Now after 39 years the price per pound has not doubled to the producer, but prices for machinery, land, and many inputs has tripled or quadrupled.  
 
Another note on inflation. Inflation is not an economic policy to encourage people to buy knowing that next year it will cost more, inflation is caused by printing money with no relative connection to actuall production.  
 
Edited by don brown, 2018-03-15 07:30:19

When we started the business in 2004 minimum wage was $8.25/hour, fuel was 46cents, our shop was $1200/month for 4000sq/ft....Today our shop is $4800, fuel is $1.06 and minimum wage is $11/hour (but you'd never get anyone for $11/hour, minimum we can pay is $16). I was going through some old boxes from our first year and was surprised to see that our monthly billing was essentially the same as it is today. Sure we do double the volume, but our unit price is just a bit over 50% of what it was 14 years ago.  
 
Which is the ironic part...As a business owner I have almost the same case to make as the original poster...so how do you square that circle?

We live in a world nowadays where you can walk into just about any major retailer and walk out in a half hour with anything, vehicle, camper, furniture, home improvement, you name it. You can finance a vehicle now for 96 months or more, a camper for up to 20 years, furniture do not pay for 2 years, how many times does a major retail store try to shove a new credit card at you?! Take a drive around all the new subdivisions being built around the city and all the new furnishings, window coverings, landscaping, vehicles, etc. take a drive to clear lake this summer and see all the new cottages-homes up there built and being built! Long gone are the days of old cottages and used furniture, now it’s new top of the line everything! I asked a loans manager friend of mine about this one day “how does everyone do it”? He said they all just sign on the dotted line, and run themselves into massive debt. So to answer the initial question, wages maybe haven’t kept up with increases, but consumer credit has gone crazy and people are going crazy using it!! Live within your means!!!