Stefanson doesn’t have a minimum-wage choice Tiny October increase dropping Manitoba’s rate to lowest in Canada simply not an option for unpopular government By: Tom Brodbeck Posted: 7:00 PM CDT Thursday, May. 5, 2022

Hey there, time traveller!
This article was published 05/05/2022 (1306 days ago), so information in it may no longer be current.

It’s only a matter of time before Premier Heather Stefanson falls in line with other Conservative governments in Canada and boosts the minimum wage by more than the marginal increase planned for the fall.

Conservative governments in Saskatchewan, New Brunswick and Ontario are all raising their minimum wages well beyond inflation to better align the hourly rate with the soaring cost of living.

Ontario has already raised its minimum wage this year by $1 to $15 an hour and is planning another 50-cent hike in October. “For too long, workers have been falling behind and wages have not kept up with the cost of living,” said Ontario Finance Minister Peter Bethlenfalvy.

“For too long, workers have been falling behind and wages have not kept up with the cost of living.” – Ontario Finance Minister Peter Bethlenfalvy

New Brunswick boosted its base wage by $1 an hour in April and has announced a second $1 increase in October, bringing its hourly minimum to $13.75. Trevor Holder, the province’s minister of post-secondary education, training and labour, called his province’s minimum wage (the lowest in the country prior to the April increase) “downright embarrassing.”

Not to be outdone, the Saskatchewan government announced this week it’s jacking up the minimum wage from $11.81 to $13 an hour in October and will increase it to $15 an hour by October 2024.

So far, it’s been crickets in Manitoba. The Progressive Conservative government is sticking with its plan to tie the minimum wage to the previous year’s rate of inflation. Under that calculation, the base wage will rise 40 cents an hour to $12.35 in October, which would be the lowest in Canada. Despite soaring inflation this year — the highest in more than 30 years — there is no planned increase beyond that until October 2023. Last year the hourly rate rose by only five cents. That means under the current scheme, minimum wage will increase only 3.8 per cent from October 2021 to October 2023.

If inflation rises about seven per cent in Manitoba this year (it was 7.4 per cent in March), the minimum wage could increase to $13.20 in October 2023, which would still be last among the provinces.

If inflation rises about seven per cent in Manitoba this year (it was 7.4 per cent in March), the minimum wage could increase to $13.20 in October 2023, which would still be last among the provinces. That would also be around the time Manitobans are scheduled to go to the polls for a provincial election.

In normal times, tying the minimum wage to inflation is sound policy. It ensures workers don’t lose purchasing power and provides employers with predictable labour costs. But these are not normal times. Inflation continues to rise at historically high rates and workers are rapidly losing purchasing power. That hits low-income people the hardest.

It’s precisely why even Conservative governments, not typically known as champions of minimum-wage hikes, are bucking the trend and significantly jacking them up.

The Stefanson government will have little choice but to follow suit.

Like Saskatchewan, Manitoba could argue that given the unique circumstances, the province has to temporarily suspend its normal practice of indexing wages to inflation and make a one-time adjustment (or two) to preserve workers’ purchasing power.

There’s a downside: small business and not-for-profits would be disproportionately affected. Many, especially in the retail and hospitality sector, have already been hard-hit by the COVID-19 pandemic. Most were not adequately compensated for the lost revenue during shutdowns and the restricted access to their businesses. The last thing they need is a 10 to 20 per cent increase in their labour costs. Bolstering compensation for businesses that bore the brunt of those public-health measures could help offset those costs.

There’s another downside: higher wages also fuel inflation. As wages rise to keep pace with the consumer price index, businesses increase prices to offset growing labour costs, creating a see-saw effect that could contribute to prices spiralling out of control.

Still, doing nothing on minimum wages is not an option. The provincial government will be under significant political pressure to follow the lead of their Conservative brethren elsewhere in the country. The province doesn’t have to increase wages to $15 an hour by 2024 like Saskatchewan, but it will have to do better than a 40-cent increase this year.

The province doesn’t have to increase wages to $15 an hour by 2024 like Saskatchewan, but it will have to do better than a 40-cent increase this year.

The Tories’ political opponents, both the NDP and Liberals, will be pushing hard for action leading up to the next election (they’ve already started).

Stefanson should get ahead of it now. She can’t afford not to.

tom.brodbeck@freepress.mb.ca

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Tom Brodbeck
Columnist

Tom Brodbeck is an award-winning author and columnist with over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.

Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.