
NEWCOMER WAGES GROWING FASTER THAN CANADIAN WAGES
Immigration law
28 Jan
Real wages are
adjusted for inflation, so any wage increase caused by inflation doesn’t count
as real growth-basically, it’s like getting a “raise” from your coffee shop for
the same price, but it’s just the cost of your latte going up.
According to a
December 9, 2024, article from Statistics Canada, newcomer entry wages saw
significant growth, while Canadian real wages actually took a bit of a dip.
Looks like newcomers are getting a bigger boost, while the rest of us are
trying to keep up….
It is known that
Newcomers' median wages grew by 6.7%, while overall real median wages for
Canadians fell by 1.6%. The real median entry wage for newcomers rose from
$40,200 in 2021 to $42,900 in 2022. (The median wage reflects the typical wage
for each occupation, sitting at the middle of the wage range when all wages are
arranged in order.)
The median wage differs among immigration pathways. The overall median wage for newcomers one year after admission rose from 2021 to 2022 across all economic immigration pathways combined. However, when analyzed by specific pathways, notable differences emerged:
- Newcomers admitted through the Canadian Experience Class (CEC) and business programs saw a decrease in median wages.
- Caregivers and provincial/territorial nominees experienced a slight increase.
- Significant wage growth was observed among those admitted through the Federal Skilled Worker Program (FSWP) and the Federal Skilled Trades Program (FSTP).
The drop in
median wages for CEC immigrants is thanks to a huge spike in admissions, from
25,000 in 2020 to 130,000 in 2021. It’s like inviting more people to a party
and suddenly realizing there’s less cake to go around-more newcomers, but the
wages didn't quite keep up with the guest list.
With less
competitive Express Entry draws, candidates with lower CRS scores received
invitations to apply. Since CRS scores depend on education and work experience,
those with lower scores are likely to earn less than those with higher scores.
The common
question that comes up is: Why are median wages important?
It is noted that
Newcomers' median wages are often a good indicator of their future financial
success. For many workers, wages tend to grow over time, so a higher starting
wage can lead to much higher earnings throughout their careers.
Canada’s immigration programs aim to bring in skilled workers who are likely to secure jobs and help the economy by:
- Providing labor to Canadian businesses
- Purchasing goods and services as consumers
- Paying taxes to federal, provincial, and municipal governments
Higher median
wages for newcomers suggest better economic prosperity now and in the future,
making these wage increases a sign of success for Canada's immigration
programs.
Immigrants in
Canada generally see their earnings rise over time.
For example,
newcomers admitted in 2016 had median employment earnings of $58,400 in 2017,
which grew to $76,800 in 2021, according to the latest IRCC Express Entry
report.
The report shows
that while median earnings can vary depending on the year of admission, the
overall trend is clear: median wages steadily rise each year after admission
for all groups. It's like starting with a small raise and watching it grow
bigger year after year-So, good news for newcomers.
The wage gap
between women and men has been getting smaller over time, according to
Statistics Canada. In 2022, the gap was much lower than in previous years. In
2012, women earned 36.7% less than men, but by 2022, the gap had decreased to
24.4%.
A 2020 study by Statistics Canada found that the following factors are linked to higher earnings for newcomers:
- More Canadian work experience before arriving
- Strong proficiency in official languages
- A higher level of education
- A younger age at arrival
More Canadian work experience before arriving Among these factors,
Canadian work experience before landing was the strongest predictor of higher
earnings. Plus, arriving at a younger age had a big impact on earnings, not
just 5–6 years after landing, but even 10–11 years down the road. It's like the
earlier you start, the bigger the payoff.
Foreign
nationals can work legally in Canada before landing through various programs,
including:
Study permits,
International Mobility Program (IMP) work permits, Temporary Foreign Worker
Program (TFWP) work permits. Additionally, several Provincial Nominee Programs
(PNPs) help nominees obtain work permits, and the Atlantic Immigration Program
(AIP) offers nominees a two-year work permit.
In conclusion,
newcomer entry wages in Canada are growing at a faster pace than those of
Canadian workers. This trend highlights the positive economic impact newcomers
are having, with higher wages driven by factors such as Canadian work
experience, language proficiency, and education.
As a result,
newcomers are making a bigger impact on Canada’s economy, benefiting not just
themselves but the country as well. It’s a win-win situation: newcomers thrive,
and Canada prospers.
RRM Law can
assist newcomers by providing expert legal guidance throughout their immigration
journey, ensuring they understand their rights and opportunities. Whether
helping with immigration applications, work permits, or residency processes, RRM Law can support clients in
navigating complex legal requirements and securing the best possible outcome.
Additionally, the firm can offer services related to employment law, contracts,
and any other legal matters newcomers may encounter as they settle and grow
their careers in Canada.