Shockingly, having the lowest minimum wage in the country does not set residents up for success
by rayanne gwilliam, Contributor
There are some rather ugly and unpleasant statistics on Saskatchewan that have been coming out recently, such as having a high rate of child poverty and, having the lowest minimum wage in the country. This would not be troublesome if minimum wage were still a viable source of income to live off, but in this case, it isn’t.
If the cost of living on average were lower than it currently is, and/or there were multiple people working for a living to provide income, there is a possibility that our numbers would be lower. However, that is not the case, and there are a variety of family dynamics that further complicate things. There are many single-income households with multiple kids, someone who is sick with a preexisting condition and in need of intense care, and single-parent homes with children and little-to-no support.
Not only are wages low as is, but there can also be scenarios which reduce an employee’s hours and, therefore, their income. It is essential that supports for such irregularities are also taken into consideration as the increase in the number of people who are financially unstable damages the economy due to lack of consumer purchasing. I bring this up because having a low source of income, especially the lowest possible income, presents numerous challenges.
For example, food insecurity. There is generally reliance on getting food stamps or products from food banks, mixed with one’s own resourcefulness to put food on the table. Much of the food options available for this group are unhealthy and have health related consequences like obesity, diabetes, heart disease, etc. Other challenges caused by a low income can be the inability to purchase house insurance, not having the funds or abilities to repair or replace household items, or an inability to pay all the bills which can lead to some services being cut off. Being that Saskatchewan in and of itself is a sparsely populated province, there is also job insecurity, especially in fields with high levels of competition and expenses or rural communities without the funds or the population for major businesses. Making minimum wage means it takes individuals more time to earn the income needed to afford basic necessities.
This brings me to my next point on how the stress of these insecurities (and others faced) can be very damaging to one’s health. This includes the harm of sleep deprivation and exhaustion in cases where someone is working multiple jobs or abnormally high hours in order to make ends meet. Not getting a proper amount of sleep is known to impact performance and mood in a negative way, as does stress itself. Apart from that, working at such a constant overbearing pace will take a toll on the human body, especially in cases where the job is physical labor. Our general healthcare is free; however, that does not mean everyone is in a position where they have good coverage, if any. This impacts the accessibility of optometrist services and glasses, dentists and dental work, medications, and emergency services like ambulance rides.
These medical needs increase as we age, which leads into another point of the inability or reduced rate to put money away for retirement, so people have to work much later in life than they should. Similarly, building up debt is quite common and difficult to deal with, and can be both a biproduct and a maintenance factor of poverty. Young adults pursuing secondary education very often take out student loans, which, depending on the interest rate and the total amount accumulated over the years, can take them decades to pay off while still trying to stabilize their lives. There is also no guarantee that the educational path pursued grants them a successful and well-paying job to get out of said debt or prevent more.
Clearly, there are many variables in this situation which is part of what makes it so complicated to solve. For this reason, a multidirectional approach feels appropriate. Should minimum wage increase, the cost of businesses to pay their minimum wage employees rises, which is theorized to lead to layoffs. Furthermore, should the minimum wage increase for a brief period, people can start to develop confidence in their spending options, which, while good in theory, can cause an increase in the demand of products. Once this happens and demand becomes high while the supply is still low, the cost of production inreases, which runs the risk of inflation.
Inflation devalues money, which is why it’s so difficult to keep wages consistent for a long period of time without individuals falling into poverty, or whole countries falling into a recession or depression. Although the economy can be steady and predictable, it never reaches a state of complete equilibrium, and certain things have a very high level of elasticity, meaning they are easily impacted by changes. Due to this instability, wage increases often do need to be slower and price limits need to be set.
Considering the deficit we have as a country currently, the option of fiscal policy is less likely to be successful. This is because it uses both government money and taxes to fund things, which can lead to profits, but would take more time to recuperate from. If monetary policy were implemented as well as a price ceiling in collaboration with a minimum wage increase, there is a probability of success. A price ceiling would curb substantial inflation, aided by monetary policy controlling interest levels and money availability. Keep in mind that changes would need to be slow and would not last, meaning further increases or adaptations would be needed in the future.