Wage rates are less elastic than simple supply/demand until you get to macroeconomic scale. I'm obviously not an expert on Canada, so I'll try to illustrate on

Wage rates are less elastic than simple supply/demand until you get to macroeconomic scale. I'm obviously not an expert on Canada, so I'll try to illustrate one way it might work, but please feel free to shoot this full of holes... Say companies in Canada start by paying their employees half of a competitive wage. Not all employees will notice. The ones who are willing to move thousands of miles will eventually disappear but there will always be new hires, right? Thus the management gets away with low wages. I _have_ seen this exact scenario play out in several locations in the US, but not Canada. In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company." At that point the company will never make enough money and can't even dream of raising wages. Only at that large scale (companies competing for talent and then trying to turn their talent into revenue) do you start to see the effects of their salary range.