A Léger survey, published recently, indicated that an increasingly large proportion of Canadian and Quebec consumers live paycheck to paycheck.
Like me, you can see from week to week that everything costs more. And, unfortunately, I don’t see the day when the situation will improve.
Everything costs more
For two years, the inflation rate in Canada has reached heights not seen in forty years.
According to Statistics Canada, over two years, inflation reached 11.3% in the country. This means that what we paid $100 for today costs us $111.30. This is an average.
Certain goods and services experienced much higher increases. Thus, the price of gasoline is up 23.1%, food costs 18.5% more and housing costs us 11.6% more.
And, if you were unfortunate enough to have taken out an adjustable rate mortgage in recent years, your monthly payment could have increased by 37.2%. This represents several hundred dollars more each month.
Ultimately, whether it’s eating, housing or traveling, it costs us a lot more.
If consumers had managed to save money during the pandemic when outings were limited to a minimum and the federal and provincial governments had put forward programs to support the economy by paying money to consumers, these Savings have quickly melted since then.
Wait for your pay
The Léger survey, which I mentioned at the beginning of this column, indicated that 47% of Canadians live paycheck to paycheck. At 38%, this proportion is a little less pronounced among Quebecers, but this represents a significant proportion of the population whose finances are precarious.
In an article in the Journal de Québec on September 10, journalists Francis Halin and Martin Jolicoeur discussed workers who said they had to take a second job to eventually make ends meet. In Canada, there are around a million people in this situation.
Until recently, the lack of labor experienced in most companies allowed workers to easily find a second job.
But we are starting to feel a certain slowdown in several sectors and the labor shortage is suddenly becoming less alarming. While there were 212,100 jobs available at the end of the first quarter of 2023 in Quebec, the number had increased to 195,700 at the end of the second quarter, a decrease of 16,400. Everything suggests that a second job will soon be harder to find.
And the salaries?
Still according to Statistics Canada, if inflation reached 11.3% over two years, average salaries increased by 10.3%. Again, this is an average. The difference of 1% may seem minimal to us, but it still represents impoverishment for workers.
And what about the hundreds of thousands of retirees whose retirement funds are not indexed? Many of them have to tighten their belts.
During a recent meeting with an entrepreneur in the restaurant and hotel sector, the latter confided to me that, for several months, his employees, paid every two weeks, had made a request for the pay to now be paid to them every week.
As for employees who work on a temporary basis for two or three days a week, they inquired whether it would be possible to be paid every day. A slipper with that?
If the economy slows and unemployment increases, we will have to expect a difficult future.
Reduce your purchases
The current situation forces consumers to make choices. The additional money that must be spent on the mortgage, food and gasoline, to mention just these three areas, is no longer available for other purchases.
Food store owners are already seeing a decrease in the value of the grocery basket. People are depriving themselves of certain foods, buying more house brands and increasingly frequenting discount stores like Dollarama.
Unfortunately, as is always the case during economic crises, it is always the most vulnerable who suffer the most.
In Canada, as in Quebec, food banks are seeing their clientele increase and their food decrease. That doesn’t bode well.
It is therefore not surprising to note that, according to a recent Royal Bank survey, financial uncertainty has become the main concern of Canadians.
Obviously, like any other previous economic crisis, we will eventually get through it, but it will not happen without victims.
If you find the time is long, go to your financial institution and borrow $100,000. You will see how quickly the months pass.
Thought of the week
I dedicate the thought of the week to all of us:
2023-09-25 23:22:23
#paycheck
