New Brunswickers make less median employment income than most other Canadians

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Appeared in the New Brunswick Telegraph-Journal, June 14, 2023
New Brunswickers make less median employment income than most other Canadians

According to a recent study published by the Fraser Institute, despite progress in certain areas, New Brunswick still lags behind most provinces on key labour market indicators.

Let’s start with the broadest measure of income analyzed in the study—Gross Domestic Product (GDP) per person, the most commonly used metric to compare overall economic performance across jurisdictions. In 2019, the last pre-pandemic year, New Brunswick had the third-lowest per-person GDP in the country (ahead of only Nova Scotia and Prince Edward Island).

The study also spotlights median employment income, which reflects the wages, salaries and commissions of workers including the self-employed. For this metric, New Brunswick ranks highest in Atlantic Canada at $33,500—but the Canadian average (excluding the Atlantic provinces) was $3,350 higher than in New Brunswick.

Consequently, the typical working New Brunswicker takes home considerably less employment income than most other Canadians. While the gap has narrowed over the past decade, much more progress is required for New Brunswick incomes to reach the income levels of all provinces to the west.

More worrying stats. According to the study, New Brunswick’s employment rate (58.6 per cent), which measures the share of the adult population that’s working, trails the rest of the country (outside Atlantic Canada) where 62.4 per cent of adults are working.

One reason for this difference is New Brunswick’s older population. However, once analysis is restricted to the core working age (25-54), a gap still exists. Regardless of the causes, a lower employment rate is worrying for several reasons including the implications for government finances. New Brunswick already faces several long-term fiscal headwinds. The province’s recent fiscal policies have helped, but all else equal, a smaller share of the population working will mean less income tax revenue flowing into government coffers in the long-term to help provide services to an aging population.

Finally, there are more people actively looking for work in the province than are unable to find it. The Bank of Canada defines the unemployment rate (which is different than the employment rate) as the percentage of the labour force that does not have a job and is actively looking for work. On this indicator, too, New Brunswick lagged behind most of the country in 2019 and throughout most of the preceding decade. In 2019, the unemployment rate in the rest of Canada (excluding the Atlantic provinces) was 5.5 per cent compared to 8.1 per cent in New Brunswick.

While the province’s unemployment rate has trended slightly downward over time, it remained significantly above the national average throughout the entire 2010s.

By global standards, New Brunswickers enjoy a high quality of life, freedom and opportunity. However, the province’s labour market is underperforming. Key metrics including median employment income, the employment rate and the unemployment rate all suggest New Brunswick still has some catching up to do to reach most other Canadian provinces and the national average.

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