UPDATED – The Debate: Raising the Minimum Wage

The debate on the minimum wage is heating up in Ontario and getting greater attention across the country.  Pushed by the recent Ontario government panel to offer advice on adjusting the minimum wage, and regional advocacy efforts to see the rate rise to $14/hr, the conversation is shifting towards one of fairness and actual costs of living.  The Ontario government has agreed to raise the wage to $11/hr does little to appease those for an increase (reflective of the costs of living) or against. Regardless, the pressure to make changes that lift people out of poverty remains.

On January 28th the Ontario Minimum Wage Advisory Panel released their recommendations to the Ontario government.  This was following three months of consultations around the province in the fall of 2013 to better understand the views of Ontarians on what the minimum wage should be and how it should be calculated moving forward.

The result was that the Panel felt they could not give an accurate idea of what the minimum wage should be, but concluded it should be tied to the Ontario Consumer Price Index and revised annually. It was also recommended that a 5 year indepth review be instituted as well.

Responding to the report, the Ontario government agreed to a slight increase of $0.75 which will bring the minimum wage to $11/hr – leaving people earning this rate 16% below the poverty line.  The increase, although much smaller than advocates had hoped, reflects the 6.7% in inflation since the last raise to the rate in 2010.  The Premier, Kathleen Wynne, said she took the impact on business into account when considering the increase.

The current minimum wage in Ontario is $10.25 and was scheduled to be increased in 2010 as part of the provincial poverty strategy, but this was put on hold.  Meanwhile, with an increase in low wage work it was estimated that 40% of individuals above the age of 25 are earning a minimum wage.  The problem:  a full-time minimum wage worker is 21% below the poverty line.

Canada Without Poverty presented to the Panel and called for the minimum wage to be set to a living wage, which would reflect actual costs of living in specific regions and ensure individuals and families could cover a bare bones budget.  Included in this calculation would be the costs of housing, childcare, transportation, clothing, nutritious food, and additional health care costs.  Not included are other important financial considerations such as debt repayment and saving for the future.  What is most amazing about the living wage is that it is a partnership between business and government – the living wage would be adjusted according to social service programs offered by government.  For example, if there was a $10/day child care plan, then the amount of the hourly wage needed would drop.

Another key point is that a living wage is a human right – one that should be recognized by governments in Canada as it falls under the International Covenant on Economic, Social and Cultural Rights (which Canada ratified in 1976).  CWP Executive Director noted this in herpresentation to the Minimum Wage Panel last November:

“In this context, Canada has been repeatedly told by the UN human rights system that in order to meet its international human rights obligations, it must raise the minimum wage to a living wage.  For example, in 1998, when Canada was reviewed by the Committee on Economic, Social and Cultural Rights – responsible for monitoring Canada’s compliance with the ICESCR – the Committee stated in its Concluding Observations that it was “concerned that the minimum wage is not sufficient to provide an adequate standard of living for a worker and his or her family.” They reiterated this same concern in 2006 noting that the Government had not sufficiently responded to the 1998 concern.  In 2009, after his Mission to Canada, the Special Rapporteur on the Right to Housing recommended that provinces and territories review their minimum wage rates in light of the homelessness problem in Canada.  And, more recently, the Special Rapporteur on the Right to Food told governments in Canada in his final report that minimum wage must be “at least a living wage” in keeping with Article 6 and7 of the ICESCR, recommending that governments specifically:

… (c) Set the minimum wage as a living wage, as required under the International Covenant on Economic, Social and Cultural Rights and consistent with ILO Conventions No. 99 (1951) and No. 131 (1970), particularly as regards the requirement that the minimum wage should be fixed taking into consideration, inter alia, “the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups;””

We are not the only ones to bring this idea forward. The Canadian Centre for Policy Alternatives (CCPA) and CUPE Ontario are supporters of the minimum wage being a living wage.

This month on a special “Project Money” edition of CBC’s The Current, CCPA’s Trish Hennessey made a point of connecting the minimum wage to a living wage.  The CCPA makes the case to have a $14.50/hr minimum wage, which would be 60% of the average industrial wage.

In CUPE Ontario’s submission to the Panel, they note that the minimum wage should be a living wage at $14/hr and moving forward should reflect increases in the cost of living. On their website the union quotes Janice Folk-Dawson who is chair of CUPE Ontario’s University Workers’ Coordinating Committee:

“This is an equality issue. Minimum wage earners are disproportionately women, racialized workers, people with disabilities and new immigrants,” she said. “They are also the people doing difficult, front line service jobs like cleaners, food service workers, the child care workers who look after our kids, the personal support workers who look after our aging parents, and the social service workers who support people with developmental disabilities.”

Ontario has an opportunity to lead the country in terms of minimum wage policy.  They will now tie with Nunavut as the province/territory with the highest minimum wage at $11/hr (Alberta has the lowest at $9.95/hr), but remember, this is still well below the poverty line.

As governments and business continue to debate the issue it would be prudent to consider the workers who earn this wage and the impact this has on their life and families.  It is not just about a number, it is about people.

*Updated January 28th, 2014

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