Minimum wage ‘complete joke’

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This article was published 25/08/2022 (1334 days ago), so information in it may no longer be current.

Desiree McIvor remembers when she could barely make ends meet because she earned minimum wage.

That was 10 years ago.

Now, as a parent, she wonders how any family could make do on $11.95 an hour.

“To be honest, it’s a complete joke,” said McIvor, an anti-poverty advocate. “Most of their income will go to their rent, and then you’ve got to decide between groceries, shelter or even utilities.”

“It’s keeping people in poverty.”

The Canadian Centre for Policy Alternatives issued a report Thursday that shows a living wage in Winnipeg would be $18.34 an hour, or $33,379 annually.

That’s over three dollars more than the $15 minimum wage proposed for October 2023, $4.84 more than the $13.50 minimum wage set to take effect Oct.1, and $6.39 more than Manitoba’s current rate of $11.95.

The centre estimates the living wage in Brandon and Thompson at $15.66 and $16.25, respectively.

The report defines a living wage as “the hourly rate at which a household can meet its basic needs once government transfers have been added to the family’s income… and deductions have been subtracted.” The calculation is based on a family of two parents, with two children aged four to seven, who work 35 hours per week.

The spending categories include food, clothing, shelter, transportation, child care, health insurance, parent’s education, a contingency fund and miscellaneous household expenses. Additional factors, such as retirement savings, owning a home and leisure costs beyond the minimum were not included.

Niall Harney, who co-authored the report with economists Jesse Hajer and Michael Apata, said the numbers were calculated based on data from before January 2022. Climbing inflation rates between January and August have increased the cost of living.

“The recent increase in inflation, which we’ve been living with since about the start of last year, has absolutely affected the costs that we use to calculate the living wage,” Harney said. “There still is a significant gap between what’s required for a living wage and what the minimum wage is going to provide.”

Upping wages is imperative, but is not the only way to help lift Manitobans out of poverty, Harney said. Given that the report also takes factors such as government support payments and transfers into account, increasing the capacity of social services — such as subsidized child care and rental assistance — may also help.

A common misconception about increasing the minimum wage to the living standard is that it will kill jobs. This notion is not consistent with the most recent economic literature, Harney said.

“The research is pretty clear that the employment impact of raising the minimum wage, even by a significant amount, is quite small and that the overall positive benefits of raising the incomes of low-income workers create huge benefits for the economy,” Harney said.

McIvor, who works with low-income individuals each day at Make Poverty History Manitoba, believes implementing a true living wage would give people financial independence.

“Instead of retroactively attacking poverty, why don’t we do something proactive and help these people before they have to experience homelessness?” she said.

Despite fears about the impact it could have on small businesses, Harney believes that not paying a living wage comes with a much higher price.

“When employers are allowed to pay workers a poverty wage, it means children are living in poverty, that people are having to take on multiple jobs to make ends meet, people are living with stress, people are having the reduce the amount of food they eat,” Harney said.

“This comes with all sorts of negative health effects and negative social effects, which ultimately society ends up paying for.”

cierra.bettens@freepress.mb.ca