Canadians deserve decent pay

A raise for those who need it

We often hear that low-wage workers are young workers, living with their parents, who don’t really need the money to survive. We also hear that raising the minimum wage will only hurt them, making it harder to break into the labour market.

While lots of young workers are employed in low-wage jobs, many adults are as well. Women and racialized workers are disproportionately represented in these low-wage jobs.

In fact, 22 percent of women earn less than $15/hour, compared to only 14 percent of men. In the federal sector, almost a third of minimum wage earners are immigrants, many of whom are workers of colour. Older minimum wage workers are also more likely to work full-time than part-time.

We also know that when the minimum wage increases, workers who earn just above that get a raise too.

Studies have found that even workers earning up to twice the minimum wage will experience positive ripple effects from a minimum wage increase. Significantly, this lower-wage ripple effect benefits young workers and women the greatest.

Index it to build a strong economy

Minimum wage workers today are more likely to have a postsecondary degree than they did 20 years ago. But while the cost of living has increased steadily over the past few decades, a typical worker’s wages have failed to keep up.

A national federal minimum wage indexed to inflation would set a high standard for provincial and territorial minimum wage legislation.

Despite claims the sky would fall ahead of recent provincial minimum wage increases, the results in unemployment rates were negligible and inflation rates did not balloon. Further, there is no evidence of a long-term decline in employment rates among youths aged 15-24 following minimum wage hikes.

In fact, a recent study which examined 318 U.S. minimum wage increases from 1979 to 2016 found no net job losses for affected workers in the five-year period following an increase in the statutory minimum wage.

Canada can create good jobs and decent work for everyone.

Improve the lives of all Canadians

This government was elected on a commitment to a federal minimum wage. Canada’s unions are working to hold them to their promises and make life better for Canadians.

With a $15 federal minimum wage included as a key priority in the mandate letter for the Minister of Labour, it’s our job to make sure that a wage increase benefits as many workers as possible.

Tens of thousands of workers in federally regulated sectors, like transport, banking, and telecommunications/broadcasting industries, would directly benefit from a $15/hour federal minimum wage. In 2017, nearly 70,000 federal private-sector workers earned less than $15/hour.

But it’s not just federal private-sector workers, a $15/hour federal minimum wage would encourage provincial and territorial governments to follow suit, with the potential to benefit nearly 2.8 million workers directly.

Research shows that increases in the minimum wage can be an effective tool in reducing poverty and inequality, such as the gender wage gap.

With so many positive direct and secondary benefits, this change has the potential to improve the lives of millions of workers across Canada.

The time has come for fairness—Canadians deserve decent pay.

Won’t raising the minimum wage just mean layoffs and fewer jobs?

There’s no evidence that minimum wage increases lead to an overall increase in unemployment. There is however some suggestion that younger workers — particularly teenagers — might be replaced by older, more experienced workers, as a result. Once these younger workers enter the labour market, however, they will see the material benefits of a higher wage. In fact, with the current state of Canada’s labour market, now is the right time to raise the wage floor.

Won’t raising the minimum wage just cause businesses to increase prices?

Overall, there’s no evidence that minimum wage increases cause higher prices across the board nor do minimum wage increases lead to sustained inflation. In fact, many minimum wage earners work in competitive industries where businesses can’t simply pass on costs to the consumer.

Some smaller businesses may increase their prices slightly to offset higher labour costs, but most businesses are able to accommodate wage increases through other cost adjustments, or will experience benefits from the minimum wage increase that offset the marginal increase in labour costs.

Isn’t this going to put a huge strain on small business owners?

For businesses of any size, direct labour costs usually range from under 10 per cent to around a third of overall costs, meaning that the impact of a minimum wage increase is relatively small. The vast majority of Canadian businesses affected by a federal minimum wage increase will be larger enterprises that employ 50 employees or more. In fact, the evidence suggests that businesses tend to see reduced costs elsewhere as a result of minimum wage increases because of lower employee turnover and higher productivity.

Aren’t most workers earning the minimum wage teens living with their parents?

No. In the federally regulated private sector, most minimum wage workers are in fact between the ages of 25 and 54—the core working age population. Outside of the federally regulated private sector, the vast majority of workers are 20 years or older. Moreover, the percentage of workers over 25 earning the minimum wage has been increasing over time.

In some cities, $15/hr still isn’t enough to cover rent. Why not just call for other solutions like a living wage, universal basic income or rent controls?

While campaigning for basic income, a living wage and rent control are key components of a broader, long-term strategy to reduce poverty and increase living standards for low-paid workers, an increase in the minimum wage would offer immediate financial relief to thousands of workers who are struggling to get by.

A higher, uniform standard for federal workers is a first step. Once this is achieved, we will further examine workplaces where employers can implement and maintain a living wage policy, as has been done in some businesses and municipalities. 

Isn’t the promise of a higher wage meant to motivate workers to get a post-secondary education or more skills training?

Working a minimum wage job should never be a sentence to living in poverty. In fact, low pay is actually detrimental to the pursuit of higher education and upskilling opportunities since low-paid workers become trapped in a cycle of survival and are unable to afford the costs of enhanced training or education. There is even evidence that a higher minimum wage causes companies to raise their educational requirements, which provides those seeking to enter the labour market—particularly youths—with an incentive to seek better education.

If the minimum wage goes up, doesn’t that mean people living on disability or other social security programs will be left further behind?

If disability benefits and other welfare payments are not increased to reflect the higher cost of living, those unable to participate in the labour force will fall behind. That’s why it’s vital that our struggle to end poverty and reverse a declining standard of living for millions of Canadians does not end with the achievement of a $15 federal minimum wage.