A minimum wage debate was sparked just in time for the Labour Day weekend, with Saskatchewan now boasting the nation’s lowest minimum wage.
On Labour Day, Alberta’s minimum wage is being increased to $9.75, bumping it above Saskatchewan’s current minimum wage of $9.50.
The government is following this issue closely, Minister of Labour Relations Don Morgan said, citing Saskatchewan’s current minimum wage ranking as a disappointment.
“It was never our wish or desire to be the lowest in the country,” he said. “We always wanted to be competitive mid-range or in the top half.”
Considerations around raising the province’s minimum wage are typically sparked by recommendations made by the Minimum Wage Panel, which are submitted every second year.
The last wage increase was passed on Labour Day, 2011, but it’s unlikely another year passes before the province’s next minimum wage increase.
“We know that cost of living has gone up in our province, so we think that it’s worthwhile to look at it earlier rather than waiting another year,” Morgan said, adding that he’s likely to make an equivalent recommendation to cabinet later this fall.
Pulling responses from the public consultation process attached to this year’s provincial labour review, Morgan said that a more proactive means of increasing minimum wage has proven itself a popular recommendation.
A method called “Indexing” is currently the respondent’s favourite option, and includes charting the consumer price index and other variables to ensure the minimum wage is consistently up to standard.
“We think the rationale that should be used is frequent smaller increases that have a notice period so they’re predictable and planned.”
Prince Albert and District Chamber of Commerce CEO Merle Lacert said that he would readily welcome an increase to the province’s minimum wage.
In a city where the average rental rate is $817 per month, there’s not a lot of money left over for minimum wage employees’ other needs.
“With minimum wage at $9.50, now, current minimum wage workers are battling inflation,” Lacert said. “The biggest pieces that they do battle with are housing, food and consumables.”
The cost inflation of these necessities of life has far outpaced the minimum wage increases of recent years, he said.
Citing an ever-growing list of people waiting for affordable housing, Prince Albert Community Housing Society manager Linda Boyer agrees with Lacert’s assessment.
Sitting at around 166, the list represents people unable to afford housing in the City of Prince Albert — the tip of the iceberg, she notes.
It was never our wish or desire to be the lowest in the country ... We always wanted to be competitive mid-range or in the top half - Minister of Labour Relations Don Morgan
In no uncertain terms, Boyer said that minimum wage as it currently stands is not enough to live on.
“We always have paid above minimum for all of the projects we have,” Boyer said. “We see how tight it is firsthand and how tough it is to live on a minimum wage.”
“I think that a (minimum wage) increase for Saskatchewan would be timely, and it will still be very much a challenge to live on a minimum wage, but it would definitely ease some of those pressures,” Lacert said.
The effect on business
Raising minimum wage will have an immediate effect on business owners, Lacert said, noting that this effect is likely to be more positive than many assume.
“If there is an increase in that minimum wage they’ll see the dividends in their businesses through better sales, better service that the staff are providing (as well as) better consistency,” he said.
“I think that the stronger that the collective is — meaning the stronger that the businesses are, the stronger that the employees are — the overall economy of Prince Albert and Saskatchewan will strengthen.”
Gateway Mall general manager Greg Dionne questions the long-term positive outcome of minimum wage increases.
“No matter what the cost is, the retailers pass it on to the customers,” he said.
“It’s a very vicious cycle, and at the end of the day they think they helped the worker because they gave them an extra 50 cents … We forget that the minimum wage workers are the consumers.”
Increasing personal tax exemption rates is a much better approach — something he said is much less likely to occur, because minimum wage increases come at “no cost to the government.”
The Saskatchewan Party has already done this, Morgan insisted, having increased the base exemption for personal income tax since they took power, removing 114,000 people from the tax rolls.
Any effects raising the minimum wage may have on the business community will be at the forefront of the government’s mind when the Legislative Assembly of Saskatchewan resumes sessions later this year, he said.
“We want to make sure that we don’t raise it too fast or too high that it causes layoffs, because that’s a worse option, or businesses close because they can’t afford it.”