Increasing the minimum wage for Manitobans from $11/hour by $0.15 did not satisfy employees, unions, and political opposition leaders at a rally at the Legislature on Sept. 19 (see Susan Huebert’s Full time workers living in poverty).
Yet, on Oct. 1, we saw this slight increase on our pay cheques, leaving considerations for families, businesses, the economy, and legislation.
On Sep. 29, CBC News Minimum wage to increase in Manitoba for first time since 2015 notes the speeches in support of a living wage from NDP leader Wab Kinew, and Jon Gerrard, MLA for River Heights.
CBC News: ‘Minimum wage is a poverty wage’: Rally calls for hike to $15/hour in Manitoba Rally held during International Basic Income Week cites Kevin Rebeck, President of the Manitoba Labour Group: “The province needs to follow in the footsteps of others like Ontario, which has proposed legislation to boost minimum wage to $15 an hour by 2019, and Alberta, which has promised to do the same by October of next year. [Ontario] raised minimum wage by 50 cents this year to $11.35.”
In Minimum wage to increase in Manitoba for first time since 2015 there is a call for a balanced approach and a suggestion of another idea by Jonathan Alward, CFIB’s Director of Provincial Affairs, to increase the basic personal exemption on income tax, which is $9,271 in Manitoba.
Josh Brandon, Community Animator with the Social Planning Council of Winnipeg and Chair of Make Poverty History Manitoba says, “A job is the best way out of poverty, but only if the wages cover the basic cost of living…The current minimum wage is not based on any estimate of the cost of living, nor is it indexed for inflation.”
CCPA’s A Family Living Wage for Manitoba describes, “In many cases it means that adults in the family are working long hours, often at two or three jobs, just to pay for basic necessities. They have little time to spend with their family, much less to help their children with school work or participate in community activities.”
Brandon explains, “A two-parent family with both parents working full time on minimum wage still leaves them with a household income that falls $1,500 below the poverty line. And for single parents, working full time at minimum wage earns them an income that falls $8,000 below the poverty line.”
The CCPA report notes, “The frustration of working harder only to fall further behind is one many Canadians can relate to.”
Brandon explains, “According to Statistics Canada, 38,600 Manitobans work for minimum wage, 55 per cent are over age 20. Another 73,700 Manitobans earn 10 per cent above the minimum wage ($11.77). This means that over 100,000 Manitobans, despite working, are living on or at poverty wages.”
The idea of a national living wage across Canada is discussed by Mark Swartz from Monster, a website that matches those looking for work with job opportunities.
“There were some 1.25 million people earning minimum wage, or about 8 per cent of the country’s 15.3 million salaried employees. Nearly 60 per cent of minimum wage earners are youths aged 15 to 24, and almost as large a share of them lives with family. Women are disproportionately represented in low wage jobs – fully one-third of women earn less than $15 / hr, compared to only 22% of men.”
Considerations need to be made by businesses.
Brandon understands employers’ concerns: “The evidence of the economic impacts of increasing minimum wage is mixed. While some business groups have pointed to raising minimum wage leading to increased unemployment, this ignores the positive impacts of higher minimum wage,” says Brandon.
“For example,” he says, “higher wages lead to better economic growth as low wage workers recycle their income back into the local economy. Higher wages also encourage businesses to make capital investments that improve the productivity of their workers.”
Brandon further explains, “Moreover, employers elsewhere have found that employee retention increases, making training investments in staff make economic sense, and lowering hiring costs for business.”
Studies support these facts.
Leah Piehler from Carlton in Community First Paying employees a living wage is good for business from May 31, 2017, explains that with a living wage, employees only need one job and the respect between employees and employers is reciprocated.
In Piehler’s article, Josie Rudderham states that with a living wage, employers can expect a highly committed and focused team that is inspired by solidarity and loyalty.
A US study by Orange County Living Wage notes, “Raising wages is affordable – employers are able to absorb the costs of wage increases through higher worker productivity … and become self-sufficient and rely less on social services.”
The efficiency of this is explained by Jenny Rouse from Net Consulting, in Paying the living wage benefits business as well as employees. She finds, “80% of employers felt their staff delivered better quality of work after paying them the living wage, with 75% of employees agreeing that their work was improved. One major UK firm found that paying contractor staff a living wage had cut staff turnover by half.”
Brandon confirms this. “When low-wage workers see an increase in their wages they spend their money locally. A living wage allows families to participate in the social, civic and cultural lives of their communities. They support local business and participate in community events. We all benefit when we reduce poverty in our communities,” says Brandon.
“Increasing the minimum wage to the Low Income Cut Off Before Tax (LICO-BT) measure for a single parent family ($15.53 in 2014), sets the minimum wage based on the actual cost of living,” explains Brandon.
In CCPA’s A Family Living Wage for Manitoba, the 2016–17 living wage for Winnipeg is $14.54/ hour; for Brandon it is $14.55 and for Thompson it is $15.28. The 2013 Calculation Guide’s update was completed in early 2017.
In this report, CCPA finds in 2010, the City of New Westminster became the first municipality in Canada to officially pass a living wage policy. Since then, three [other BC communities are becoming] living wage employers — the Huu-ay-aht First Nation (already certified), Vancouver, and Port Coquitlam.
Calculating a living wage for Hamilton’s December 2011 report, Working and Still Poor? It doesn’t add up! proves that a decent quality of life for employees allows them to raise children, be healthy, successful citizens, and enjoy recreation, culture, entertainment, and participate fully in social life.
What is taken into account for this standard is: all relevant income, taxes, expenses, transportation, private health insurance, childcare, education, and managing a household.
Deanna Ogle and Iglika Ivanova, (Vancouver) in Living Wage Canada’s Making Paid Work Meet Basic Family Needs in Metro Vancouver, describes two working parents with two young children need to earn at least $20.62 per hour before taxes, which may seem high, but is a bare bones budget for BC.
What can Manitoba learn from its history?
Dr. Evelyn L Forget from the University of Manitoba, in her February 2011 analysis, The Town With No Poverty Using Health Administration Data To Revisit Outcomes Of A Canadian Guaranteed Annual Income Field Experiment, describes the reliability for Dauphin citizens – the working poor finally living and planning as they had a livable income from 1974 to 1979.
This study had profound effects. Hospitalizations for accidents, injuries, and mental health declined. A “social multiplier effect” – stronger results than expected, took place as other members of the community benefited in the wealth of the community.
What Manitoba is doing well so far is noted by Yosie Saint-Cyr from Slaw, Canada’s online legal magazine. She says, a zero tax rate for small businesses on the first $1.25 million of active income is a step in the right direction.
“The Minimum Wage Indexation Act (Employment Standards Code Amended) enacted in 2017 amends the Employment Standards Code so that the minimum wage is adjusted on October 1 of every year starting in 2017 to reflect changes in the Manitoba Consumer Price Index,” notes Saint-Cyr.
“Currently, minimum wage is set out in the Code’s regulation. The new law also indicates that beginning in 2018 and before April 1 of every year following, the minister must publish the minimum wage that is to apply under this section on a government website starting on October 1 of that year,” explains Saint-Cyr.
Saint-Cyr’s work finds that after Ontario consultations on Bill 148, the government is committed to a $15-an-hour plan, considering tax breaks for businesses. Jeff Leal, Ontario’s Minister Responsible for Small Business, supports this.
According to John Laforet, President of Broadview Strategy Group Inc., “Employers will need to learn how to adjust their business and financial models, sales and marketing strategies to effectively respond to the consequences of high and rapid minimum wage increases.’
Brandon explains, “We are developing a living wage network which will help businesses develop the plans to make the transition. Groups like CCEDNet are also available to provide advice. Living Wage Canada also provides resources and experiences from other like-minded businesses.”
Resources for Employers:
Retail Council: Minimum Wage by Province
Canada Pay Works Payroll Legislation 2017
Federal Government: Minimum Wage Across Canada
Winnipeg Chamber of Commerce
Living Wage Canada