The Ontario Chamber of Commerce likely surprised everyone when they suggested in September the best way to adjust the minimum wage is to automatically link it to the cost of living.
Many anti-poverty groups have been advocating for such a policy as well as demanding Ontario play catch-up for the three years in which the minimum wage has been frozen at $10.25 an hour. Ontario is one of three jurisdictions in Canada that has no mechanism for increasing the minimum wage.
While the Chamber is no fan of having to pay workers more, they argue that by linking the minimum wage to the cost of living it would be predictable, transparent and fair.
A recent poll suggests most Canadians agree. The September Vector Poll* indicated 53 per cent of Canadians “strongly” supported increasing the minimum wage every year by the cost of living. Another 36 per cent were “somewhat” supportive.
That’s about as close to consensus as you are going to get in Canada.
Where it gets tricky is the adjustment for the three years in which the rate was frozen.
Asking open-ended what the minimum wage should be today, Ontarians averaged $12.52 an hour – far more than the present minimum but less than the $14 advocates say is needed to lift workers out of poverty.
None of this is likely to happen right away given Premier Kathleen Wynne has appointed a panel to look into the issue despite such broad consensus. That panel is not expected to report back until 2014 – effectively freezing wages another year for Ontario workers who earn the least.
The panel will be chaired by Anil Verma of the Rotman School of Management at the University of Toronto. According to the Sunshine list Verma received $259,730 in compensation in 2012, a 2.6 per cent increase over the previous year. In 2011 Verma had received more than a 13 per cent increase in pay.
For health care advocates this is an important issue. We know that Canada is facing fast rising rates of inequality – a key determinant of health and especially mental health. The Wynne government could use the minimum wage as a tool to send a signal that they are listening and recognize that rising rates of poverty will only boomerang back in the form of health care costs.
They appear to be already thinking about inequality and its implications. Ontario is looking at introducing its own mandatory pension plan parallel to the CPP as a way of sidestepping a federal government that refuses to make reasonable adjustments to keep seniors out of poverty.
The minimum wage debate also comes at a time when there is a growing living wage movement in North America. American municipalities in particular have begun to set minimums that are well above U.S. federal levels, arguing that governments are in effect subsidizing corporations by having to provide assistance to low-wage earners.
While companies like Wal-Mart openly oppose such initiatives, living wage advocates point that in 2012 Wal-Mart boasted profits of nearly $120 billion and company CEO Michael Duke made upwards of $16,000 an hour – or slightly less than what a worker would earn in a year if they received the minimum wage in the U.S.
In a recent Wellesley Institute report Sheila Block writes that between 2003 and 2011 the share of Ontario employees working for minimum wage has more than doubled – from 4.3 per cent to 9 per cent.
Whereas the perception is that young people work for minimum wage, Block states that 40 per cent of workers earning minimum wage were over the age of 25 in 2011 and that 19.1 per cent of recent immigrants were working at that rate. A higher percentage of racialized workers and women also earn that amount.
That’s not the whole story. If we sweep in those who are earning less than $14.25 an hour – close to the rate that advocates would like to see as a new minimum wage – there are nearly one million Ontarians who would be affected.
While the right insists the market should determine pay, not governments, there is little public support for this position. In the Vector Poll only 7 per cent of Ontarians said there should be no minimum wage.
The idea of a living wage is also entwined with religion. For example, the Catholic Church believes a “just wage” is one that not only provides a worker with enough to live, but provides a little more so the individual can live “becomingly.”
Writing in Catholicity, Reverend Robert Johanson writes in 2007 that depriving a worker of just wages is “gravely sinful.”
More than 90 per cent of nations have either a government legislated minimum wage or one that is negotiated through collective bargaining.
Clearly the Vector Poll shows that Ontarians are way ahead of their government in the sentiment that those at the bottom of the ladder need a hand up now. If the panel does not come back ready to index the minimum wage, some hard questions will have to be asked about the choices for that panel.
* The Vector Polling Coalition consists of a number of labour organizations – including OPSEU — that pool their resources to conduct three large omnibus polls per year. The polls are undertaken by Vector Research and Development Inc. The findings in the most recent poll are based on interviews conducted September 18-24, 2013 with 1,108 adults throughout the country. Overall results have a sampling error of plus or minus 2.9 percentage points.