This is because the strongest underlying factors that determine worker pay in real terms are how productive workers are and their value to an employer’s production process.4 So, for Canada, this implies wage growth of around 3 per cent—2 per cent for inflation and 1 per cent for trend productivity growth.
By then, however, the U.S. financial system had been severely disrupted, and the economy contracted through the middle of 1908. The recent crisis echoed many aspects of the 1907 panic.