a two-tiered labour market, with one tier doing well and the other falling behind
In London, Ontario, a city that added four thousand jobs and wore the badge of affordability, the deeper ledger told a quieter and more troubling story: wages rose just one percent while inflation climbed two, leaving the median worker with less purchasing power than the year before. The data, drawn from federal income tax records and analyzed by Western University researchers, revealed not a rising tide but a divided harbour — remote professionals anchored to global salaries on one shore, and precarious workers drifting further from stability on the other. London's moment of apparent economic momentum became, on closer inspection, a portrait of a city whose growth was real but whose rewards were unevenly claimed.
- London's job market added 4,000 positions in early 2021, but beneath the headline, median wages grew only 1% while inflation ran at 2%, eroding real purchasing power by nearly a full percentage point.
- Among Ontario's 16 major urban centres, London ranked 12th in wage growth — and 36th out of 44 when measured against all provincial census areas — signalling a structural lag, not a temporary dip.
- A two-tiered labour market has taken shape: remote workers earning competitive global salaries coexist with part-time and precarious workers in service and retail whose real incomes are quietly shrinking.
- The pandemic accelerated the divide — high earners working from home grew more financially secure while low-wage workers faced mounting instability and falling purchasing power in the same city.
- Workers aged 25 to 44 — those most likely to be buying homes or raising families — face the sharpest squeeze, as even London's reputation for affordability erodes for those without access to remote, high-wage employment.
London, Ontario entered 2021 with a jobs headline that seemed to promise momentum: four thousand new positions added to the local economy. But researchers at Western University, combing through Statistics Canada income tax data, found a different story beneath the surface. Between 2018 and 2019, median wages in the London metropolitan area — stretching across St. Thomas, Strathroy-Caradoc, and parts of Middlesex and Elgin counties — rose just one percent. Inflation was running at two. After adjustment, sociologist Don Kerr calculated that the average Londoner was actually taking home 0.9 percent less than the year before.
Kerr placed London 12th among Ontario's 16 major urban centres for wage growth, and 36th out of 44 when measured across all provincial census metropolitan areas. Even when total income — including pensions, social assistance, and government credits — was factored in, London ranked 15th out of 16 urban areas at 1.3 percent growth. The paradox was plain: job creation without meaningful wage gains.
Robert Collins of the London Economic Development Corporation pointed to remote work as part of the explanation. GTA residents and others were relocating to London while keeping jobs tied to competitive global salaries — earning Toronto or Silicon Valley wages while benefiting from London's lower cost of living. The city's parks, safety, and proximity to the Great Lakes were drawing newcomers even through the pandemic.
But that prosperity was not shared equally. Sue Wilson of the Poverty Research Centre named the underlying problem directly: a fractured, two-tiered labour market. London's economy carried a heavy load of precarious and part-time work — jobs that bore no resemblance to remote positions at multinational firms. The pandemic widened the gap further, insulating high earners while exposing low-wage service and retail workers to greater instability.
The pressure landed hardest on workers aged 25 to 44 — those most likely to be buying homes or starting families. In a city long marketed as an affordable alternative to larger centres, even that affordability was becoming conditional. London was adding jobs, but not the kind that kept pace with rising rents and living costs. Beneath the growth figures, two economies were quietly pulling apart.
London added four thousand jobs in early 2021, a headline that seemed to signal economic momentum. But the numbers underneath told a different story. When researchers at Western University examined income tax data from Statistics Canada, they found that residents of the London metropolitan area—which stretches across St. Thomas, Strathroy-Caradoc, and parts of Middlesex and Elgin counties—had seen their median wages rise just one percent between 2018 and 2019. Inflation, meanwhile, was running at two percent. The math was simple and grim: Londoners were losing ground.
Don Kerr, a sociologist at King's University College, crunched the numbers and found that after adjusting for inflation, wages in the London area had actually fallen by 0.9 percent. "The average Londoner, after adjustment for inflation, is taking home less than they took in the year prior," Kerr said. "I think it's part of a longer-term trend whereby incomes in London have not kept pace with other parts of the province." Among Ontario's 16 major urban centres, London ranked 12th in wage growth. Among all 44 Ontario census metropolitan areas, it placed 36th. The picture grew bleaker when looking at total income—wages plus pensions, social assistance, and government credits—where London's 1.3 percent growth put it 15th out of 16 urban areas.
The paradox was striking: job creation without wage growth. Robert Collins, director of workforce development for the London Economic Development Corporation, offered one explanation. Remote work had changed the equation. People were moving to London from the Greater Toronto Area and beyond, bringing jobs with them—positions at companies anywhere in the world that paid competitive salaries. These workers could afford London's relatively low cost of living while earning Toronto or Silicon Valley wages. "There are people living in London who can work for a company anywhere in the world," Collins said. "They are affected by wages in very competitive industries." The city's quality of life—access to the Great Lakes, parks, safety—was drawing newcomers even during the pandemic.
But this prosperity was not evenly distributed. Sue Wilson, co-chair of the Poverty Research Centre, identified the real problem: a fractured labour market. "That's the concerning thing: a two-tiered labour market, with the one tier doing well and wages going up and then the other tier people are falling behind," she said. The data bore this out. London's economy was heavy with precarious employment and part-time work. Those jobs did not pay like remote positions for multinational firms. The pandemic had only widened the gap. High earners working from home grew more secure; low-wage workers in service and retail sectors faced greater instability and falling real income.
The squeeze was particularly acute for workers in their prime earning years. Kerr noted that people aged 25 to 44—the cohort most likely to be buying homes or starting families—faced the sharpest decline in purchasing power. In a city marketed as affordable, even that affordability was slipping away for those without access to high-wage remote work. They were adding jobs to the economy but not the kind that paid enough to keep pace with rising rents and living costs. The headline of job growth masked a deeper fracture: London was becoming a city of two economies, one thriving and one struggling, with less and less middle ground between them.
Notable Quotes
The average Londoner, after adjustment for inflation, is taking home less than they took in the year prior.— Don Kerr, sociologist at King's University College
A two-tiered labour market, with one tier doing well and wages going up and then the other tier people are falling behind. That has only been made worse by the pandemic.— Sue Wilson, co-chair of the Poverty Research Centre
The Hearth Conversation Another angle on the story
So London added four thousand jobs but wages barely moved. How does that happen?
The jobs that were created weren't the same calibre as the ones that already existed. You had precarious work, part-time positions, filling gaps. Meanwhile, some people were moving to the city with high-paying remote jobs already in hand. Two separate labour markets, really.
And the people already living there—the ones who needed those new jobs—they weren't benefiting?
Not in any meaningful way. Their wages rose one percent while inflation was two percent. They were actually poorer in real terms than the year before. For someone in their thirties trying to buy a house, that's devastating.
Why would remote workers moving to London change the overall wage picture?
Because they're not competing for the same jobs. They're not applying at the grocery store or the call centre. They're living in London but earning Toronto salaries. It makes the city look attractive and affordable, which draws more people, but it doesn't help the people already here who work locally.
So the city's reputation as affordable is partly built on people who aren't actually part of the local job market?
Exactly. And that creates a strange dynamic. The city looks like it's thriving—people moving in, jobs being added—but for the people whose livelihoods depend on local employers, things are getting tighter, not easier.
What happens next? Does this gap keep widening?
That's the question. If the two-tier pattern continues, you end up with a city where some people are doing very well and others are increasingly squeezed out of housing and stability. The pandemic accelerated it, but the underlying problem—precarious work not keeping pace with cost of living—that's structural.