The announcement was made January 30, 2014 by Premier Kathleen Wynne that the Ontario minimum wage will be increased from $10.25 to $11.00 an hour starting June 1, 2014 and furthermore, will be adjusted according to the Canadian Price Index.

Those of us who are earning more, may too easily underestimate the extent to which low wages limit what people are able to do and how well they can take care of their material needs for even basic shelter, food, clothing and health. If we agree that someone working full time full year should not be living in poverty, then we need to agree we either pay adequate wages or we invest our tax dollars to reduce the impact of low wage employment.

While unfreezing the increases to Ontario’s minimum wage is preferable to keeping it static, this level is still a long way from raising worker income for those at minimum wage who are working full time full year. The gross income for someone earning $11 per hour for 35 hours per week for 52 weeks would be $20,020 which would be 11% below the low income measure recently released by Statistics Canada $22,720.

The Social Planning Council of Kitchener-Waterloo and our partners in the Kitchener-Waterloo Poverty Free Action Group support the recommendation made by Poverty Free Ontario that minimum wage must enable a full time, full year wage earner to be earning at least 10% above the low income measure. We still have a ways to go.

We need to seriously address the increasing disparity between low and high income earners. Almost 1 in 10 workers in Ontario are minimum wage earners and the number of minimum wage earners in Ontario has doubled since 2003. The most likely workers to be earning minimum wage are young workers, women, visible minorities and immigrants. An additional estimated million workers, 25 years and older, earning close to minimum wage would be impacted by the increase in minimum wage to $11.00 per hour.

Do increased wage levels have a negative impact on the economy? Are there fewer jobs as a result? Whereas any employer must deal with budgets, the transition to higher wages requires balancing of revenue against expenses. Ultimately money can be saved through greater staff retention, reductions in training expenses and in other areas which requires a longer term view and strategic awareness that a well-paid workforce is good for business and good for the economy.

Those of us who are earning more, may too easily underestimate the extent to which low wages limit what people are able to do and how well they can take care of their material needs for even basic shelter, food, clothing and health. This environment must lead to a need for government programs to provide these basics. Is it fair that our tax dollars end up subsidizing low wage employers?

If we agree that someone working full time full year should not be living in poverty, then we need to agree we either pay adequate wages or we invest our tax dollars to reduce the impact of low wage employment.

Trudy Beaulne
Executive Director
Social Planning Council of Kitchener-Waterloo
spckw@waterlooregion.org