Should Saskatchewan raise its minimum wage?
Sask.'s minimum wage is $10.96/hour, while Ontario just raised its minimum wage to $14
While some business groups are concerned about the prospect of any increase in the minimum wage, "living wage" activists maintain that wages should be increased to meet the cost of living.
As of Jan. 1, Ontario's minimum wage is $14 an hour, up from $11.60. Alberta plans to increase its minimum wage to $13.60 in October. Many provinces are expected to hike their minimum wages by the end of the year.
With a minimum wage of $10.96/hour, Saskatchewan's minimum wage is the second lowest in Canada, after Nova Scotia, though most provinces' minimum wages are $11 or just over $11. Saskatoon's "living wage" has been calculated at $16.19 an hour.
Julianne Hazlewood, host of CBC Radio's Saskatoon Morning, sat down with Canadian Federation of Independent Business vice-president Marilyn Braun-Pollon and University of Saskatchewan researcher Chuck Plante to talk about the cost of living in Saskatoon, the potential for job losses and for increased productivity.
Julianne Hazlewood: What do you make of Saskatchewan's minimum wage, where it is right now?
Marilyn Braun-Pollon: I think we've always said that the majority of businesses already pay well above the minimum wage. Also, the majority of minimum wage earners are between the ages of 15 and 24 years old. Our research currently shows 60 per cent of minimum wage earners across the country are in that age range. What our research has found is, as our minimum wage rises, young workers are the most vulnerable group in the economy. Often as their wage costs increase, as we're seeing those massive increases in provinces like Alberta and Ontario, business owners have a number of choices and hire fewer youth or cut back hours. So, those that we're trying to help are, in fact, hurt.
JH: Chuck, what should the minimum wage be in Saskatoon?
Chuck Plante: I'm the author of [the report] The Business Case for a Living Wage in Saskatoon, and the individual that calculated the living wage for Saskatoon. This year it's $16.19. A living wage is an objective measure of how much it costs to live in Saskatoon, and then we work out how much a family of four with two working parents has to earn, on an hourly basis, to meet those needs.
The point that we really try to press home is it costs money to live in Saskatoon, and when workers aren't paid enough to meet those levels, there's a risk that they're unable to stabilize their lives in ways that are going to be beneficial for themselves and also to the employer. There's a growing body of research that's showing that paying employees too little can lead to absenteeism and high turnover, and these are things that are extremely costly for businesses.
JH: Marilyn, what do you think of what Chuck said?
MBP: I think what Chuck is doing is assuming that business owners are not paying competitive wages. Saskatchewan has some of the highest weekly earnings in the country. [His idea] sounds really good, but when you look at the reality of it, the evidence is that it would have a huge impact. What he's proposing is a 53 per cent increase to Saskatchewan's minimum wage right now and what that would do is, in a restaurant with 25 employees, it would increase their annual payroll costs by $300,000. You look at the reality of that, the idea that a hike of this magnitude wouldn't have a impact, they need to talk to the owner of their favourite restaurant. We're not talking about billion-dollar multinationals.
JH: Chuck, should we assume that young people have more financial support from family members to help subsidize living costs?
CP: As a millenial, I find it really problematic to be cavalier about low wages among these age groups. I think it's in all of our interests to be able to afford an education and be able to strike out on their own, invest in housing, eventually start families, and I don't know how delaying that process is in anyone's interest. But that's exactly what happens when you allow poverty to happen within these groups. It's not a coincidence that the cities in Canada with the highest poverty rates among these age groups have the highest proportion of people staying at home and not leaving the nest.
JH: Marilyn, if Saskatchewan increased its minimum wage by $2 to $3, what would we see here?
MBP: What you would see is what you're seeing in Ontario. What we've found is the decision is already having a ripple effect with businesses. They're having to raise prices, they're delaying expansion plans, they're reducing their overall staffing hours. One business owner said they won't be able to hire the same number of students next year.
JH: Chuck, any final thoughts?
CP: I think it's just common sense that it costs money to live, and if you pay people too little, they're not going to be able to show up to work and be as dependable as we need them to be.