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LETTER: The many benefits of a $15 minimum wage

Over the past few years there have been a number of rallies calling for the minimum wage to rise to $15 an hour. Jordi Morgan regional vice-president of the Canadian Federation of Independent Business says the government must consider the affect a large, unplanned for hourly increase has on the business sector. He says his membership had expected the hourly increase would be about half the $1 announced on Thursday. The Chronicle Herald - Tim Krochak/FILE
Atlantic Canadians demonstrate for $15 minimum wage. - SaltWire Network File photo

Our province is at a tipping point.

The last few years have seen more Newfoundlanders and Labradorians slip into poverty. This has only been exacerbated by the global COVID-19 pandemic.

Meanwhile, our government is facing a debt and deficit crisis, and the oil and gas industry, which has been the basis of our economy, is becoming less and less profitable. Although there is no one solution to these problems, one way in which they may be aided is by increasing the minimum wage to a living wage.

The minimum wage is allotted to be raised on Oct. 1 to $12.15. This falls almost $3 short of $15 and is therefore well below a living wage. Half measures and small increases over time are not a substitute for enacting a living wage for all Newfoundlanders and Labradorians immediately.

The minimum wage is one area where we are lagging behind the rest of Canada. Newfoundland and Labrador has the second-lowest minimum wage in the country.

We also have the highest income inequality in Atlantic Canada, likely in part because of our low minimum wage. Increasing the minimum wage to $15 an hour would put our province at the forefront of economic progress in Canada.

However, there are more material benefits to raising the minimum wage.

With the current minimum wage, a worker in St. John’s would have to work 72 hours just to afford the cost of a one-bedroom apartment, leaving little room to purchase other necessities.

This can have serious social and health effects, both physical and mental. In addition, 30 per cent of workers in the province make less than $15 an hour, and while they are not working for the minimum wage, they still face poverty, housing insecurity and food insecurity. Raising the minimum wage to $15 would combat poverty in Newfoundland and Labrador.

It would not just benefit those in poverty, however. Increasing the minimum wage would mean that low-income earners have more money to spend, and they typically spend all of their wage increases.

This would bolster the entire economy, including local businesses. It would also contribute to less out-migration, as more people would have access to an affordable lifestyle within Newfoundland and Labrador.

This means more tax revenue and even more consumers of local goods and businesses. A common misconception is that a raise in minimum wage means businesses will raise prices.

This is not necessarily the case, as businesses have other methods to compensate, along with the benefits of having less employee turnover and more revenue from a larger base of consumers who can now afford their products. Low prices do not mean much if a large portion of consumers cannot afford them.

The minimum wage is allotted to be raised on Oct. 1 to $12.15. This falls almost $3 short of $15 and is therefore well below a living wage. Half measures and small increases over time are not a substitute for enacting a living wage for all Newfoundlanders and Labradorians immediately.

There are many other benefits to raising the minimum wage, including addressing gender income inequality. In summary, a minimum-wage increase benefits poverty reduction and general economic stimulation. A $15 minimum wage is what is best for Newfoundland and Labrador and is needed now more than ever.

Kyle Johnson,
St. John’s

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