In an Election about Affordability, Why Aren’t We Talking about Low Wages?

Affordability and economic insecurity are major concerns in this federal election. A recent Ipsos poll confirmed that 68 per cent of Canadians feel they can’t get ahead, and 82 per cent feel that life is becoming less affordable.

On the campaign trail, most parties are responding to these concerns by talking about taxes, but there’s been little discussion of the low wages many Canadians are making in the first place.

According to the Government of Canada, 42,000 workers in federally regulated companies were making minimum wage as of 2017 (the most recent year for which data is available), and about 67,000 were making below $15 per hour. (The federal government regulates industries like banks, cable companies and shipping.)

Moreover, the median income across the country in 2017 was only $36,100 per year, which works out to $19.83 per hour for a 35-hour work week.

Three parties — the Liberals, NDP, and Greens — have included in their platforms a promise to raise the federal minimum wage to $15 per hour. While this would not solve working poverty, it would certainly help many Canadians, so it’s worth digging into.

First, there is not currently a unique federal minimum wage. In 1996, after decades of falling behind provincial and territorial minimum wage rates, the federal minimum wage was established as the rate in the province or territory in which the worker is employed. If the federal government were to implement a $15 minimum wage, it would only affect those in federally regulated industries, federal Crown corporations and certain Indigenous government positions.

Second, a $15 minimum wage would still be below the living wage in most regions. The living wage is the income that each of two working parents would need per hour in order to afford basic family expenses in their community. It’s calculated by the Living Wage for Families Campaign and others across the country each year. Though the current minimum wage in B.C. is $13.85, the 2019 living wage in places like Vancouver, Victoria and Clayoquot Sound is over $19 per hour.

So is it worth implementing a federal $15 minimum wage? Yes, absolutely.

That a higher federal minimum wage would benefit at least 67,000 workers is reason enough to do it. Though it would not reach a living wage for most communities, a $15 minimum wage would help many working families get closer to a good quality of life. Across the country, there are only 24 of 795 neighbourhoods (or three per cent) where a full-time minimum wage worker can afford to rent an average two-bedroom apartment, according to recent research from the Canadian Centre for Policy Alternatives.

Earlier this month a national poll from Angus Reid found that 53 per cent of Canadians are living paycheque to paycheque. In a country as rich as ours, no one should struggle to support themselves and their family, especially if they are working full time.

A higher federal minimum wage would also improve the conditions for non-federal workers in similar jobs. When wages go up, workers have more bargaining power as they can say no to a lower-paying job in the same field. This is why higher union density also leads to better wages across the board; when some workers can secure good wages in an industry, the rest of the industry must follow in order to attract workers.

These spillover effects for non-federal workers could be significant. While those 67,000 federal workers earning less than $15 per hour represented only 7.5 per cent of federal workers, 21 per cent of all employees in Canada were earning less than $15 per hour. That’s a significant population of our neighbours who are struggling to get by.

Further, increasing the minimum wage often leads to wage increases for those earning slightly above the minimum, and reduces wage inequality overall. A higher minimum wage would also help close the gender wage gap, as women are disproportionally represented among low-wage workers.

Finally, raising the minimum wage with gradual, predictable increases is supported by the academic literature. Many studies have found little or no negative employment effects for adult workers after increasing the minimum wage, especially when done in gradual steps.

When our provincial Fair Wage Commission consulted the public in 2017, both employers and workers’ advocates agreed that small and steady increases over time would help workers while allowing employers to plan ahead. B.C.’s minimum wage will reach $15.20 in 2021.

Returning to this election, the party platforms on improving low wages leave much to be desired. With some variations, the Liberals, NDP and Greens all say they would implement a $15 federal minimum wage within the next few years but are short on details as to how that would increase thereafter. No party’s platform concretely addresses low wages beyond the minimum wage. (The Conservative party has not indicated interest in increasing the minimum wage.)

In this election, voters may be concerned about more than the minimum wage — and it’s true that affordability is about more than wages. But many of the issues we care about can be positively impacted by ending working poverty.

When all our neighbours have good, steady, well-paying jobs, they can participate in community events, contribute to their local economies and help plan for a future that benefits us all. It’s worth taking the idea of a $15 federal minimum wage seriously and pushing our parties to keep their promise.