When UBC Vancouver School of Economics professor Dr. Thomas Lemieux first began his undergraduate studies at Université Laval, a desire to apply his passion for math and science somewhere initially led him to pursue a major in engineering. But he soon realized this wasn’t his true calling and it was through his friends that he discovered economics. The types of problems the field addressed intrigued him, so he swiftly changed his academic path.
Now, Lemieux is globally recognized for his contributions to understanding labour economics and income inequality. After completing his PhD at Princeton University in 1989 and before joining UBC in 1999, Lemieux taught at MIT and the Université de Montréal.
As a student in the 1980s, Lemieux was introduced to economics in the context of a national recession. Unemployment reached a high of 12 per cent in 1983 though the economy recovered and grew by 2.7 per cent that year after a 2.9 per cent drop in activity in 1982.
“I thought, ‘Well, it would be nice to be able to use tools of economics to understand why that's the case, and what kind of policies could help people find jobs.’”
From a macro to micro lens on inequality
Although the macroeconomics of the recession piqued his interest initially, Lemieux was later more drawn to understanding the experiences of individual workers in the labour market.
“I was very much influenced by what was happening in the world. By that time, I was in graduate school in the late 1980s and that's when, actually, many observers started noticing that income inequality was going up,” said Lemieux.
While high-income wages continued to rise, lower-income pay stagnated. This growing gap between incomes became a key economic issue in countries like Canada and the US, sparking broader debates about why this phenomenon was occurring.
“People wanted to understand why is it that suddenly inequality is going up,” said Lemieux. “That's really what got me interested in the issue, because it was an important development for society and the economy at the time.”
The spillover effects of raising minimum wage
Lemieux developed an interest in the study of minimum wage during graduate school where he researched its decline in the 1980s and 1990s in Canada and the US. He noticed this was one of the explanations for the growth in inequality.
Lemieux explained that, as you move down the income distribution, the minimum wage plays a crucial role, not only in ensuring workers receive a basic standard of pay but also in influencing the broader wage structure. When the minimum wage is increased, it doesn't just lift the earnings of lower-paid positions, it pushes up wages for jobs further up the income ladder as well.
Lemieux’s widely cited research shows the positive effects of raising the minimum wage and how this can reduce inequality and boost wages across the income distribution. His work influenced government lobbying efforts for minimum wage increases in Canada. Alongside his work at UBC, Lemieux holds many editorial and research fellowship roles, including one at the National Bureau of Economic Research.
“My work was cited by people who were more involved in policy making and trying to make the case well, by letting this minimum wage go down in real terms, we've worsened income inequality,” said Lemieux.
Income inequality is still something we see today.
“People are increasingly unhappy about their standards of living. I think recent inflation made it worse,” said Lemieux. “If incomes for everyone kept going up a lot, [income inequality] would probably be less of an issue.”
The decline of manufacturing and unions
In the early 2000s, the manufacturing sector, once a reliable source of well-paying jobs for workers with varying skill levels, began to steadily decline. In contrast, the technology industry has emerged as a key driver of high-paying positions, but these jobs are concentrated among workers who are able to pursue post-secondary education. This shift continues to underscore a growing divide in the labour market.
“People in Silicon Valley are making tons of money when you have these skills, while workers who used to be in manufacturing are struggling a bit more. That's really linked to the issue of technological change and the changing nature of jobs,” Lemieux said.
Part of Lemieux's research lies in unionization and collective bargaining, central to the conversation on income inequality. Unionization is the act of bringing workers into a labour union, an organization for dealing collectively with employers to improve pay, benefits and working conditions. Collective bargaining is the negotiation process between a union and an employer to achieve these goals. Unionization in the private sector had and continues to be steadily declining, particularly in the US, but also Canada.
“Many of these middle class jobs used to be unionized, so you have this de-unionization, which tends to have a negative impact on wages of workers,” said Lemieux.
While income inequality has now been widely studied, a key part of the inequality puzzle lies in the study of wealth, a field that remains less explored.
Lemieux is the director of the Stone Centre for Wealth and Income Inequality at the Vancouver School of Economics. Launched this year with the help of a donation from the US-based Stone Foundation, the centre aims to support more research and training in wealth and income inequality, both in Canada and globally.
“That's one of the big things that we're trying to do, coming up with a better measure of the distribution of wealth," said Lemieux. "Because it's actually way more unequal [and harder to measure] than income.”
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