The minimum wage is set to rise by 25 cents on April 1. It will go from $11.15 an hour to $11.40. This is not enough and will keep people below the poverty line or just barely clinging to it.
Last year, Employment and Social Development Canada established the country’s first official poverty line, the market-basket measure which gives the cost of purchasing items such as clothing, food, transportation and shelter in various regions of the country.
According to 2017 figures from Statistics Canada, that poverty line, based on the MBM, for a family of four in semi-urban and urban parts of Newfoundland and Labrador (excluding St. John’s) is $40,423. If they fall below that, they’re living in poverty.
Even if two adults, a childless couple, are both minimum-wage earners, their ability to better themselves is really quite limited. They are, for the most part, according to economist and provincial NDP Leader Alison Coffin, working with little or no health benefits and no paid sick or vacation days. They cannot put aside rainy-day or retirement savings or even take courses necessary for advancement. If their income rises above a certain level, they won’t get the same tax-breaks or subsidies that would make life easier. Their paycheques must fund a lifestyle which may border on impoverishment.
For those who have a small child and their income is a bit too high to qualify for a government subsidy, then that child could end up in day care at a cost, she said, of almost $10,000 a year. If the children are older, then there are the costly after-school activities – the expensive dance classes and perhaps the more expensive hockey lessons.
It is a world of little hope, this world of cut hours and bad wages, where people are only a paycheque or two away from sliding into poverty. It provides, Coffin said, “a real disincentive to have children” and a “real disincentive to go to work.” Both statements are damning, the former self-defeating in a province that desperately needs young people, the latter because it’s better to do nothing than work for the basic government has to offer.
It is also, according to Dr. Christopher B.R. Smith, a social work professor at Memorial University, the world of the “black-market economy” where people work for family and friends and never declare it as income or “sell or trade prescription medications” to make ends meet. “And really,” he says, “who can blame folks for engaging in such activities (some of which are obviously more benign than others) when there is such a glaring gap between the cost-of-living and the minimum wage?”
Coffin is proposing a $15-an-hour minimum wage but wants to avoid any shock effect. She favours a gradual phasing in “over two or three years.” (The NDP position is to raise the rates incrementally until we hit a $15-an-hour minimum wage in 2021.) She says there are a number of government programs that small businesses can tap into to “offset wages” and wants to see a duality where the minimum wage is increased at the same time as subsidies to these businesses.
“That’s going to help minimize the hardship on small businesses, but at the same time really promote wage growth and help support people who really, really need a change.”
The PC Opposition was asked for its input but never returned phone calls.
The minimum-wage rate in this province is indexed to inflation, but according to Coffin the rate for Newfoundland and Labrador is pegged to the Canadian rate of inflation which is lower than this province’s. “So if the Canadian rate is 2.0 and the provincial rate is 2.2, then you’re going to be falling behind here in Newfoundland.” The province’s energy prices, she says, are going up so our inflation rate is a little higher than Canada’s.
“(We’re) really going to start to see a difference now when our electricity rates start to spike. I’m truly terrified. As soon as our electricity rates start to go up, our CPI (Consumer Price Index) will start to skyrocket and the Canadian one is going to stay a little lower and then these increases that we’re seeing will be woefully inadequate.”
to import just about everything we use also raises prices and chips away at the purchasing power of our most vulnerable.
The Provincial Economic Review for 2018 says inflation in Canada was expected to be two per cent that year while the Newfoundland and Labrador rate was projected at 2.1 and is forecast at 2.2 for this province in 2019.
A livable minimum wage would also see more money circulate in the local economy and most economies in this province could do with that boost. Coffin sees that $15 as the benchmark which will give people the “emotional and financial security” to make the choices that will lead to self-improvement. And when individual lives improve, so does society. The $15 was apparently chosen (to) “give people a good standard of living, an opportunity to break the cycle of poverty and an opportunity to advance.”
Statistics Canada figures for 2018 show 13,200 people in Newfoundland and Labrador or 6.4 per cent of all employees work at minimum wage. Of this number, 7,200 or 54.5 per cent are women. If most are people stuck at the bottom their entire lives, this has to change. If most women are there because they lack the training to do better, this too must change. And the starting point for all these changes begins at providing people with the dignity of a living wage.
Pat Cullen is a journalist who lives in Carbonear. She can be reached at 596-1505 or email@example.com.