Manitoba minimum wage an embarrassment

Opinion

Hey there, time traveller!
This article was published 17/07/2022 (894 days ago), so information in it may no longer be current.

Earlier this summer Saskatchewan Premier Scott Moe, not known for being a friend of workers, announced that the province would increase its minimum wage to $15 by 2024, starting with a bump to $13 on Oct. 1, 2022.

Moe’s announcement leaves Manitoba in the dust, where low-wage workers will see their pay rise by just 40 cents on Oct. 1, from $11.95 per hour to $12.35. On that date, Manitoba will have the lowest minimum wage in the country. At the current rate of increase, minimum-wage workers in Manitoba won’t get to $15 per hour until 2029.

The minimum wage is set by government, outlining the least amount per hour an employer is allowed to pay, ostensibly to alleviate poverty and reduce exploitation by unethical employers. It should be set as a guideline to ensure workers are being remunerated for the value they create for their employers.

The fact so many Manitobans are paid the bare minimum tells us all we need to know about low-wage employers: if they could pay their workers less, they would.

In Manitoba, the minimum wage is an arbitrary amount that is adjusted for inflation every year. It is not based on any policy or analysis, or rooted in any theory of how to set wages. In other words, the minimum wage tells us a lot about Premier Heather Stefanson’s economic strategy — or lack thereof — to help improve the quality of work for the nearly 14,000 minimum-wage workers in this province.

It’s also interesting to note that a surprisingly high number of Manitobans — 8,500 — work for only a few cents more per hour. They work for the employers who loudly proclaim they don’t (technically) pay the minimum wage.

It is precisely because Manitoba has so many employers doing the bare minimum that Stefanson must raise the wage.

Lifting the wage floor has a trickle-up effect across the economy. A hidden benefit of raising the minimum wage is to give a bump to many unionized workers whose collective agreements include a clause to raise their wage to maintain a fixed gap above the minimum.

With that in mind, giving Manitoba’s lowest-paid workers a modest raise reduces poverty and increases consumer spending — and that’s good for every income bracket. This consumer spending is a clear economic stimulant: low-wage workers spend their earnings, usually locally. This is a fact.

Contrast this with giving higher-income earners a tax break. The extra disposable income is just as likely to be spent locally as get locked away in long-term investments (or, perhaps, on renovations to a Costa Rican condominium). Wherever you stand on high-income tax cuts, they are not economic stimulus.

Critics of raising the wage use fear, not facts, to scare employers. Research using all 10 provinces over the past 30 years shows there is no net change in number of jobs (Stanford and Brennan) when minimum wage increases.

A minimum wage of $15 per hour in 2022 is not radical. Sure, when the campaign for a $15 wage started in 2017 in Manitoba (and earlier in many other provinces), it was ambitious. But a lot has happened in the five years since the campaign started. Adjusting for inflation, $15 an hour in 2017 amounts to $16.65 in 2022. By 2024, that number could reach $17.50, or even $18.

One-fifth of workers in Manitoba work for low wages (defined as less than two-thirds the median). They are all struggling under the pressures the current economic context is inflicting.

As time marches on, it is clear Manitoba’s minimum wage is falling way behind. When $15 was first proposed, Manitoba was behind the curve on minimum-wage policy. Today, Stefanson’s reluctance to increase the minimum wage out of the basement is simply an embarrassment.

Gavin McGarrigle is the western regional director for Unifor.