By Dave Coles
Since the start of the month Saskatchewan has Canada’s lowest provincial minimum wage. At $9.50 an hour it pays someone working 40-hours per week $19,700 for an entire year, which is below various poverty measurements.
The minimum wage in most provinces is $10 to $11. Many European countries have a much higher minimum wage. In Australia, the federal minimum wage is $15.51 an hour and the Canadian and Australian dollar are of similar value.
Saskatchewan’s status as the bottom payer is even worse than it appears. It’s one of only three provinces where “any person who is handicapped” can be paid less than the minimum wage.
In a recent submission to the province’s ongoing labour reform consultation, the Communications, Energy, and Paperworkers Union of Canada (CEP) called for Saskatchewan’s minimum wage to be steadily increased. How about bringing it up to $13 an hour and then tying it to inflation? This would give the lowest paid workers some economic stability.
Substantially increasing the minimum wage may cause short-term difficulties for some small businesses but it wouldn’t have a net negative effect on small businesses. In fact, some small businesses will benefit from stronger demand for their products and services if the minimum wage is increased. Economist James K. Galbraith recently noted that “there might even be more” small business jobs with a sharply increased minimum wage.
Just as a higher minimum wage can spur consumer spending, it can also improve economic productivity. Higher pay generally reduces employee turnover and increasing the minimum prods low paying businesses to invest in equipment and employee training.
But most importantly increasing the minimum wage has a broader social benefit. It lessens inequality and growing scientific evidence – in fields ranging from health to criminology – shows that inequality imposes significant costs on all parts of society. The best-selling British book The Spirit Level: Why Equality is Better for Everyone deals with the issue in detail. Research shows that distance among social groups and individuals is in and of itself bad. In effect, inequality breeds a harmful social climate. A 2009 study published by the World Health Organisation explains how “greater inequality heightens status competition and status insecurity across all income groups and among both adults and children."
As such inequality undermines social cohesion, which is bad for people’s health and quality of life. It’s not only the poor who are affected by growing economic inequality, all strata of society suffer the health consequences. Studies show that the wealthiest 20 per cent in highly unequal societies have a lower life expectancy than significantly poorer people in more equal countries.
Increasing the minimum wage is a simple and straightforward means of lessening inequality. And considering Saskatchewan’s proud history of advancing social and economic rights in this country, it’s unbecoming of the government to allow the province to become a laggard on this issue. Premier Brad Wall, it’s time to increase the minimum wage.
Dave Coles is President of the Communications, Energy and Paperworkers Union of Canada