Nfld. & Labrador

The minimum wage is going up 50 cents. Neither businesses nor anti-poverty advocates are happy

Both an advocacy group for living wages and the Employers' Council are not satisfied with a $12.15 minimum wage — but for very different reasons.

Wage gets 50-cent bump, from $11.65 to $12.15

The minimum wage in Newfoundland and Labrador rises on Thursday, from $11.65 per hour to $12.15. (John Gushue/CBC)

As of Oct. 1, Newfoundland and Labrador's minimum wage rises 50 cents to $12.15 an hour.

But neither an organization advocating for wage increases nor a business lobby group are happy with the bump, although for very different reasons.

For a full-time minimum wage earner working 40 hours a week, the raise means an extra $40 bi-weekly, before taxes.

"This is still a poverty-level minimum wage," said Mark Nichols, an organizer with the lobby group Fight for $15 and Fairness. "I still have the overwhelming sense of this being the government throwing a few coppers the way of the poor, because in real terms, it's not making a difference." 

Similarly, the Newfoundland and Labrador Employers' Council criticized the bump as being an "arbitrary" number, and one not tied to economic indicators like the consumer price index, which measures how much certain goods and services cost Canadians over time.

The head of the council said the increase also comes as COVID-19 has stressed businesses in the province, and around the world, to the limit.

"It's a very desperate time," said Richard Alexander, the executive director of the council, which includes some of the province's biggest businesses in its membership.

"It's just a really unfortunate time to implement such a drastic increase in costs when we want those businesses to survive."

Mark Nichols, of Fight for $15 and Fairness, says higher minimum wages elsewhere in Canada are attractive to Newfoundland and Labrador's younger demographics, which the province is struggling to retain. (Bruce Tilley/CBC)

Thursday's change is the second of four minimum wage increases the province announced in February.

The next increase, set for April 1, will add another 25 cents as well as what the CPI is at that time. There will then be a fourth and final increase of 25 cents on Oct. 1, 2021.

Nichols also noted the absence of looking at real-world indicators of the cost of living into the increase. His group wants to see the minimum wage raised to $15 an hour and then tied to the CPI or another such indicator to align minimum wage more closely to a living wage — and he said to help those living in poverty, it needs to happen immediately.

"The longer we take to get there, the more meaningless that number becomes. We have to get to that sooner rather than later," he said.

Service economy hit hard in pandemic

The bulk of minimum wage workers are employed in sectors like retail and hospitality, two areas that COVID-19 hit particularly hard and where recovery has been slow.

Just because restaurants are serving diners and people are drinking at bars doesn't mean those businesses are back on their feet, said Alexander.

"Nothing could be further from the truth. A lot of them are operating at reduced capacity. Their facilities aren't designed to operate at reduced capacity," he said, adding that even with federal subsidy programs, it's been tough.

"They're still hemorrhaging money. They're still having challenges paying their bills." 

Nichols agreed the wage increase doesn't please already-stressed businesses, but at the same time it doesn't help those earning the least, many of whom are younger people the province is struggling to retain.

The general minimum wage in Ontario is set to increase to $14.25 an hour on Thursday, while Alberta's stands at $15 and British Columbia's at $14.60.

"Why would they stay in a province with less economic opportunities than Ontario, Alberta, B.C., when even if they work for minimum wage, they'd be making much more than they're making here?" said Nichols.

Richard Alexander of the N.L. Employers' Council says the hike comes at a time when few businesses can barely pay their existing bills. (Bruce Tilley/CBC)

N.L.'s 50-cent jump, up from $11.65, still leaves the province in the bottom rungs of Canadian wages. Only Saskatchewan, New Brunswick and Manitoba have lower rates.

Read more from CBC Newfoundland and Labrador

With files from Heather Gillis

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