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Letter: Predictable poverty

Seniors working minimum wage jobs.
It’s not just teenagers living at home who are working for minimum wage. — Stock photo

The provincial government has announced the plan to increase the minimum wage to $11.15 an hour in April, and index it to inflation. The Newfoundland and Labrador Employers’ Council applauds the move as “creating predictability for employers.” For many workers, that means predictable long-term poverty.

It’s encouraging to see the government acknowledge that cost of living is a factor in the minimum wage, but $11.15 will not meet that cost of living. It is well below the poverty line. Minimum wage needs to first meet the cost of living, then it can be indexed to increases in the cost of living.

While provinces like Alberta, British Columbia and Ontario are announcing $15 minimum wages (two-thirds of Canada’s population), $11.15 keeps N.L.’s minimum wage among the lowest in Canada. Only Saskatchewan and Nova Scotia, representing six per cent of the country’s population, will have a lower minimum wage.

The Employers’ Council has been fear-mongering that raising the minimum wage would mean lost jobs and business. Experience elsewhere does not show job losses where minimum wages go up.

There are legitimate concerns about unemployment and job creation, but there is a suite of more effective policy tools for incenting job creation and protecting jobs — why do so on the backs of the poorest workers? Instead, the government could target the small business tax credit for businesses that have a certain number of employees, like Quebec did. There are ways to target small businesses that are employment generators, without locking workers into long-term poverty.

The Employers’ Council has applauded the change to indexing, claiming that minimum wages were being used for political gain. However, these comments are out of touch with reality, as we know minimum wages are used to eke out a living — to buy food and winter coats.

Additionally, with consolidations happening in grocery and other sectors, minimum-wage workers are increasingly working for large multinationals. Why let large employers with huge revenues pay less than poverty wages when we have other options?

The Employers’ Council has applauded the change to indexing, claiming that minimum wages were being used for political gain. However, these comments are out of touch with reality, as we know minimum wages are used to eke out a living — to buy food and winter coats. For those earning a minimum wage and deciding which bill not to pay this month, it is not about politics, but survival.

There has been a dangerous shift in how N.L.’s economy is shared between wages and profits, with a larger percentage going to profits and less to wages. N.L. needs to put that money into the hands of low-income workers, who are most likely to spend it locally on goods and services, stimulating more job creation.

Common Front NL, labour organizations and our social justice partners are working hard for minimum wage increases and indexing. But indexing must not be used to lock in a wage that is already harmfully low, which means many workers on minimum wage will never catch up, staying in poverty indefinitely.

Currently, the gap between high-income earners and low-income earners is expanding. Only one-tenth of people born into a low-income household in N.L. will move out of this economic position. This cycle of poverty not only hurts those spinning within, but also our economy. We need a substantial increase to the minimum wage, and then to index it.

In N.L., thousands of workers are paid a poverty wage. Contrary to business lobbyists’ claims, most minimum wage earners are not teenagers or high-school dropouts; more than half are 25 or older, and three-quarters have completed high school or post-secondary. Five per cent are single parents. Particularly troubling, women in the workplace are 40 per cent more likely than men to be minimum-wage earners.

Even a $15 minimum wage is just a start. It is not a living wage. The low-income line for four-person families in N.L. is around $40,000/year, which translates roughly to a $20/hour wage.

We acknowledge the minimum wage is not the only way to help people to meet the cost of living. We can and should also expand programs like child care, Pharmacare, energy retrofits and transit, to help to reduce the cost of living. Yet ensuring every worker in the province can survive, and possibly thrive on their earned wages, is essential.

We need the fight for $15 to be about dollars and sense.

Alyse Stuart

Common Front NL

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