US wages are losing to prices, and Canada’s gap is wider. Lightcast and Randstad data show why 2027 pay plans will diverge
Pay is losing the race with prices on both sides of the border. US average hourly earnings rose 3.1 percent in the 12 months to August while consumer prices climbed 3.4 percent, according to the US Bureau of Labor Statistics (BLS). In Canada, average hourly wages rose just 2.0 percent, the slowest wage growth since November 2017, excluding 2021, while prices rose 3.0 percent, Statistics Canada reported.
The squeeze looks the same on both sides of the border. The road to it does not, according to speakers at staffing firm Randstad’s 2027 salary trends webinar on Sept. 29, 2026, who argued against building a single North American pay plan around it.
“When we step back and we look across North America, we do see that the US and Canada are moving in a similar direction. But they’re not starting from the same economic conditions,” said Elizabeth Crofoot, principal economist at labor market analytics firm Lightcast, said.
Two economies, one squeeze
Randstad’s outlook projects US gross domestic product (GDP) growth of 2.2 percent in 2026 against 1.3 percent for Canada. August unemployment was 4.1 percent in the US, according to BLS, and 6.4 percent in Canada, according to Statistics Canada.
Canada carries more slack in its labor market, Crofoot said, while the US pairs faster growth with persistent inflation, a mix that hits real wages (pay adjusted for inflation) hardest. BLS data show US wage growth has trailed inflation every month since April, and Statistics Canada data show Canadian wages trailing prices since July.
Crofoot cautioned against reading Canada’s earlier wage gains as good news. “I would be careful about translating that into saying that employees are fine in Canada and they’re less fine in the US,” she said. “Canada is also coming through a period of significant cost of living increases, especially with some of the tariffs that we have seen.”
Webinar attendees pointed the same way in live polls, which were self-selected and not a scientific sample [add number of respondents]. Some 47 percent named employee cost-of-living pressure against corporate margin squeezes as their organization’s biggest friction. On 2027 merit budgets, the money set aside for performance-based raises, 46 percent were undecided, 23 percent were holding flat, 18 percent were increasing and 14 percent were cutting base merit to fund variable pay and bonuses.
US job ads shout louder about perks
The sharpest split shows up in what employers advertise. Lightcast analyzed mentions of four benefit categories (career development, financial and supplemental pay, wellness, and work-life) in US and Canadian job postings from June 2024 to July 2026. US postings led in most categories across the operational and skilled trades, professional and digital sectors.
The widest gap sits in work-life benefits such as childcare and flexible work. In the professional sector, 26.6 percent of US postings mentioned them against 7.2 percent of Canadian postings. In the digital sector, the split was 16.5 percent to 4.6 percent.
Share of job postings mentioning work-life benefits (childcare, flexible work and other programs), US vs. Canada. Source: Lightcast
Crofoot pointed to law as part of the explanation. “In terms of statutory compensation elements, Canada is much stronger across the board on other medical, retirement, leave pay,” she said. “So Canada sort of ticks the box on all of that, whereas the US has a lot more to make up because we don’t have all of that.”
Canada wins one category: career development in the digital sector, mentioned in 20.2 percent of Canadian postings against 17.4 percent of US postings. “Canadian employers are getting the message that they need to invest in their employees in this regard,” Crofoot said.
Follow the 2027 money
Neither market is planning broad raises, extending a pattern of flat pay increases through 2026 [add /us internal link 2: 2027 pay raises or merit budgets story, anchor of five or more words]. In the US professional sector, Randstad’s data shows merit budgets concentrating on financial planning and analysis (FP&A) and high-impact revenue roles at 3.8 percent to 4.6 percent, while corporate sales and administrative staff get 1.2 percent to 2.6 percent, topped up by variable commissions. In Canada, skilled trades base adjustments range from 2.9 percent to 3.9 percent, and shortages of Red Seal tradespeople, certified under Canada’s interprovincial trades standard, push employers toward custom craft rates and shift differentials [name Randstad report, date and link].
Marie-Noëlle Morency, head of brand, content and communications at Randstad North America [add location], said employers now aim money at scarcity, including artificial intelligence (AI) and tech skills. “They may not want to spread raises evenly, but targeting money at some employees with niche skills, for example, in AI and tech, in healthcare and skilled trades, where we actually see skill shortages,” she said.
Pay transparency adds a Canadian bill
Since Jan. 1, 2026, Ontario has required employers with 25 or more employees to publish expected pay, or a range no wider than C$50,000, in public job postings, with exemptions for higher-paid roles, and to disclose whether they use AI to screen, assess or select applicants. Randstad’s outlook estimates that emerging provincial pay transparency rules push Canadian organizations to set aside 2.0 percent to 2.6 percent of payroll to fix wage compression, meaning newer hires earning close to or more than longer-serving staff, before they post ranges publicly.
The US has no federal posting rule, but 27 jurisdictions had pay transparency laws as of July 29, 2026, according to Brightmine. [add /us internal link 3: pay transparency story, anchor of five or more words]
Crofoot advised triage over blanket correction. “It’s being really pragmatic about it, identifying again, critical roles, critical geographies, even down to critical stores,” she said.
The playbook splits at the border. US postings carry more of the benefits pitch because Canadian law already covers more of the basics, according to Crofoot. Canadian employers need compression audits before posted ranges, and digital career development keeps their edge.
Jeff Johnson, head of marketing at Randstad North America [add location], summed up the shift for both markets. “Maybe across-the-board raises aren’t the way to go,” he said. “Maybe it’s setting aside discretionary funds for critical skill shortages.”
