Let’s ride resource jobs to higher wages for all

If you are one of those earning BC’s new $10.45 minimum wage, the raise is no doubt good news, but it is still dramatically lower than what workers enjoy in sectors such as forestry

One solution is to lift everyone up in one stroke by giving minimum-wage earners a further $4.55 raise to $15 an hour, as advocated by one group.

Among Canada’s provinces, that would catapult BC from the middle of the pack to $4 per hour above the next-highest jurisdiction — a bold step to bring the bottom wage up.

While the public mulls over this proposal, it is also worth asking which industries create the largest paycheques today. Fresh evidence suggests the key to more raises is those industries that are able to pay more because they are adding more value to the economy.

Trevor Tombe, an assistant professor of economics at the University of Calgary, approached the question by breaking down Canadian wages by industry. Then, for each industry, he asked how much value is created in the economy.
The surprising findings are timely for those picking a career, or changing a career, or advising a young person on how to plan a career.

The national average wage is about $30 an hour. Jobs in machinery and wholesale trade are typically found at this level.
Construction jobs and roles in scientific and professional services are a little above. (Figures used are from 2010.) At the lower extreme, between the $10 and $20 level, you will find jobs in clothing, retail trade and crop production.

Tombe found that the highest per-hour wages in Canada are earned by those in natural resources. And they were not just a little higher — these paycheques came in way, way higher. Oil and gas extraction stood head and shoulders above all the rest at over $90. Mining was next highest at $50. Support jobs for mining and oil and gas rated in the high $30s. Apparently, Canada’s role as a responsible innovator in commodity production is matched by the resource sector’s ability to pay good wages.

Yet a crucial question remains: What do these jobs do for the Canadian economy overall? This is an important point because of the belief held by some that, OK, resource workers do get paid a lot, but that’s only so that rich corporations can get richer.

In fact, it was not just CEOs and their companies that did well in resources. Resource jobs produced up to 15 times more value for Canada’s economy than the average job.

Resource-extracting jobs beat out so-called “value-added” manufacturing that turns extracted resources into finished products. Take furniture-making: One job in that field creates added value of $54,000. But a forestry worker delivers $94,000 in added value — almost double.

It didn’t matter where Professor Tombe applied his measuring stick — whether per dollar of revenue, per job, or per hour.

Resource jobs beat the pack every time. Resource jobs created more value than manufacturing jobs because they paid higher wages, used fewer costly imports, created more jobs in the supply chain, and paid hefty royalties as well as taxes.

This directly resulted in higher earnings. Each $10 per hour in value added was associated with $4.89 in extra hourly earnings. Anyone searching for this kind of raise can start by identifying fields that create the most value, then search out the training needed.

Five bucks an hour more is a great concept. Now that we know that the way to get there is by encouraging high-value-added resource jobs, responsibly done, there should be no stopping us.

Stewart Muir, an award-winning author and journalist, is founding executive director of the Resource Works Society.

This article originally appeared in The Province.

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