Saskatchewan will raise the minimum wage in October by 20 cents per hour, moving it to $10.20.
Your reaction to that news likely says more about you than the changing wage.
For people trying to keep body and soul together on minimum wage, every little bit helps. For a full-time worker earning the minimum, it’s an extra $8 per week on the paystub.
If you’re the person signing the paycheque, you may view that $8 very differently. A common refrain in the business community when minimum wages go up is that either prices will have to go up or hours will have to be cut back to make up the difference.
Businesses point to something called cost-push inflation, which suggests that every hike in wages pushes up inflation. They also say that most minimum wage workers are younger workers who are doing it for a sideline rather than feeding a family.
The Canadian Federation of Independent Business was quick to weigh in.
“Saskatchewan has made good progress on increasing the basic personal exemption to $15,378 and should continue to use the tax system to help workers keep more money in their pockets,” Marilyn Braun-Pollon said in the release. “Small businesses believe letting low-income earners keep more money in their pockets is a far better approach, as is helping them upgrade their skills for better paying positions.”
The argument for higher minimum wages is equally compelling. Proponents say that money distributed to the poorest people is spent in the community and is good for the local economy. It isn’t spent in Florida on holidays.
Plus it’s the fair thing to do.
And despite the threats, those jobs can’t be outsourced to the Third World. Most of the time they are service industry jobs that must be performed in person.
The extra wrinkle that makes this interesting is the brutal labour shortage in Prince Albert that makes finding good people difficult.
On Monday afternoon there were more than 800 jobs listed on www.saskjobs.ca, which means a good number of this city’s employers are being impacted. It’s a story being repeated across the province as boom times in Saskatchewan are seeing job creation outpace the people willing to take the positions.
As a result, many employers already pay more than the minimum.
For the record, when Saskatchewan’s new minimum wage takes effect in October, at that time it will still be lower than that of Yukon ($10.54), Quebec ($10.35), Ontario ($11), Nunavut ($11), Nova Scotia ($10.40), Manitoba ($10.45) and British Columbia ($10.25), although many have some separate rules for age and the kind of work being done.
It will be higher than the provinces that pay $10 per hour -- New Brunswick, Newfoundland and Labrardor, Northwest Territories and Prince Edward Island -- and our neighbour to the west, Alberta, which pays the lowest rate in the country at $9.95.
Still, that dwarfs the lowest state minimum wage in the U.S., which is $5.15 an hour in Wyoming, just ahead of Minnesota at $5.25. The highest in the U.S. is Washington at $9.32, followed by Oregon at $9.10.
In the United Kingdom it’s $10.02. In Mexico it’s 61 cents. In Australia it’s $16.88. A bunch of countries have minimum wages of less than a dime.
On Monday, in announcing the change, Labour Relations Minister Don Morgan said the extra money will give minimum-wage earners more disposable income and improve their standard of living. The more interesting bit of news is the province’s plan to set up an index that will automatically increase the wage each year.
The change would be announced in June with the wage beginning three months later on Oct. 1.
It’s a good idea to build a measure of predictability into the process for both sides.
Small business owners know that wages will continue to go up and consumers understand that prices will follow. Then wages will have to go up again.
It’s the world we live in.
Prince Albert Daily Herald