Canadian Labour Congress

Canadian Labour Congress

May 24, 2006 12:23 ET

CLC: 'Higher Interest Rates not Good for Working Families,' Georgetti Says

OTTAWA, ONTARIO--(CCNMatthews - May 24, 2006) - The Canadian Labour Congress today expressed its disappointment that the Bank of Canada has continued to raise interest rates, with the announced increase to 4.25% of its trendsetting overnight rate.

"In the absence of any signs of mounting inflation, the Bank should have acted to maintain the clear benefits of a low unemployment rate," says Canadian Labour Congress president Ken Georgetti. "At this time, higher interest rates are not good for working families."

Andrew Jackson, chief economist of the Canadian Labour Congress notes that core inflation is low and stable at 1.7%, that the high dollar is clearly containing any upward pressures on prices, and that wage increases are running at 1% over the Consumer Price Index, which is well in line with productivity growth.

"The Bank says it must act to limit future inflationary pressures, but acting too soon could raise unemployment. Despite a fairly low national unemployment rate of 6.4%, the youth unemployment rate is still 11.5%. Some regions are still struggling and labour shortages remain quite limited except in parts of Alberta and British Columbia in the skilled trades and in some health occupations," Jackson explains.

Georgetti concludes: "A fairly tight job market is a good thing for workers. It encourages employers to train and to recognize the skills and credentials of recent immigrants. It helps young people entering the job market. It means ordinary workers are getting modest real wage increases for the first time in many years, and it helps ease the major adjustment in the manufacturing and other sectors caused by the near 90-cent Canadian dollar."

The Canadian Labour Congress, the national voice of the labour movement, represents 3 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 135 district labour councils.

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