Andrew Stevens, University of Regina
September 10, 2024
This fall, several provinces across Canada are scheduled to increase their minimum wages. These provincial adjustments follow the federal government’s decision to raise the federal minimum wage to $17.30 back in April.
On Oct. 1, Ontario, Saskatchewan, Manitoba and Prince Edward Island will all see new minimum wage rates come into effect, while the Northwest Territories raised its minimum wage on Sept. 1. Relatively substantial increases were also announced by most of these governments during the COVID-19 pandemic.
Saskatchewan’s decision to index its minimum wage to inflation in 2014 was a step in the right direction for workers. The Saskatchewan government announced it would raise its minimum wage to $15 as of Oct. 1, although several exemptions apply and it will still possess one of the lowest rates in Canada.
After decades of inflation and wage stagnation have eroded wages for workers, the upcoming wage hikes represent progress. But workers certainly deserve more than that.
The fight for minimum wage
Coverage of the minimum wage debate often misses some crucial points. These wage increases didn’t simply arise from the halls of well-meaning policymakers; they were the result of years of struggle and active campaigning by labour and civil society organizations.
In Ontario, the Fight for $15 and Fairness was at the forefront of this movement. It took years of mobilization before the Liberal government at the time introduced Bill 148 — the Fair Workplaces, Better Jobs Act, 2017 — that boosted minimum hourly rates to $15 by Jan. 1, 2019.
Community organizations, like the Workers’ Action Centre, a worker-based organization in Toronto that improves the working conditions of people in low-wage and unstable employment, are instrumental to the movement. Their efforts are part of a broader, international movement for fair wages.
In the United States, similar campaigns unfolded, such as the Fight for $15 that advocates for raising the national minimum wage to $15 from US$7.25 an hour. Changes at municipal and state levels in the U.S. happened because of grassroots activism, even as the federal rate remained unchanged.
Pushback from business lobby groups
Incremental advances for workers are routinely opposed by business lobby organizations like the Canadian Federation of Independent Businesses which pushes back against measures that improve conditions for the lowest-paid workers in Canada.
This resistance is particularly evident in retail and food services, where employers routinely complain about labour shortages and appeal to governments to help them recruit foreign workers to fuel their low-wage business models. Or, worse yet, seek to lower the working age to 13 or younger, as the Saskatchewan Chamber of Commerce did in a recent statement.
A key part of the rhetoric business lobby groups use is “small business ideology.” This ideology frames small mom-and-pop shops as being under constant siege by red tape, taxes and fair wages. Their solutions often include reducing taxes and increasing subsidies for businesses — anything but paying higher wages.
What is overlooked in this narrative is that some of the largest and most profitable companies in Canada are among the worst offenders when it comes to paying low wages.
COVID-19 exacerbated matters when many workers, tired of working conditions and low-pay, left their positions to pursue other sources of employment.
Living wages are needed
The minimum wage debate isn’t just about wages, but the overall working conditions and benefits for all segments of the labour market, especially the ones that were deemed “essential” during the pandemic.
Living wage policies aim to create minimum rates of pay based on the cost of living in a particular region. These can come from either companies adopting living wage policies for their workers out of goodwill — something known as moral suasion — or through policy interventions by cities and local governments.
The contemporary living wage movement emerged during a period of union decline when economic growth was failing to “trickle down” to the most vulnerable.
It could be argued we are seeing a similar situation now, considering corporate profits skyrocketed during the pandemic at a time when workers struggled to make ends meet.
Basic income deserves consideration
Academic research and policy experiments have demonstrated the value of basic income models as a means of redistributing wealth to workers left out of the gains experienced by their employer.
Such measures deserve serious consideration, but they face challenges. One major issue is that workers are often excluded from these decision-making processes, and the policies rely on elected officials to sustain such programs. In July 2018, for example, Doug Ford’s newly elected Conservative government cancelled Ontario’s basic income pilot program, leaving about 4,000 people without financial support.
Another missing piece is the role of unions and collective bargaining. Starbucks workers in the U.S. and Canada have been at the forefront of food service certification campaigns for good reason.
Data in Canada shows that even lower wage workers benefit from unionization by measure of a wage advantage, and the securing of supplementary benefits like health care and paid leave. Workers deserve more than just an hourly bump in pay.
And most importantly, unions put workers at the forefront of the movement at a time when the cost of living is stripping away wage gains. That’s important. Federal programs like dental care and accessible child care can help alleviate the cost of living crisis, too.
So while we should celebrate minimum wage increases, it’s important to realize workers deserve more in this economy, and that these legislated increases are not silver bullets when it comes to fighting poverty and inequality. As wage hikes roll out across Canada, we should be prepared for the predictable outrage from business lobby groups that usually accompany basic pay increases. This shouldn’t stop workers from demanding what they deserve.
Andrew Stevens, Associate Professor, Faculty of Business Administration, University of Regina
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This article is republished from The Conversation under a Creative Commons license. Read the original article.