Living wage still not being met, despite minimum wage increase

Is the minimum really the bar we want to be aiming for?

In early May of 2022, the Saskatchewan government announced plans to increase the province’s minimum wage from $11.81 per hour – the lowest in the nation – to $15 per hour by October of 2024. While this increase would move our minimum legal pay rate to a mid-range in national ranking, slightly below the west coast and just above the east, it may not alter the status quo by as much as it may first appear.

A report titled Making a Living by the Canadian Centre for Policy Alternatives (CCPA) Saskatchewan Office was published on data from 2021, and details the income a family of four (two adults employed full time, with two children) would require to meet their basic needs. A living wage in Saskatoon in 2021 was calculated to be $16.89 per hour, and in Regina it was $16.23; both the current minimum wage and the planned increase rate fall below these numbers. The Director of the CCPA Saskatchewan Office, Simon Enoch, sat for an interview on the contents and implications of the report.

Can you explain what a living wage is and how it differs from a minimum wage?

A living wage is a calculation that we make to sort of determine how much a family of four, with two young children, would need to meet their basic needs in a certain city […] A minimum wage is sort of a floor below which it is illegal for an employer to pay you, but a minimum wage doesn’t usually take into consideration what it costs to live. The minimum wage is the same whether you live in La Ronge or Estevan, whereas a living wage is going to try to take those more regional costs into consideration.

When it comes to a living wage, you propose a Bare Bones Budget in the report. What goes into that, and what is exempt?

Obviously, the sort of basic necessities that any family would need, whether that’s shelter, transportation, and once again that one is going to depend. The family always has a used car, but then when we did a Weyburn calculation there’s no transit system there, so you have to factor in taxis. Other necessities like food costs, being able to buy your kids clothes, a very basic healthcare plan […] things like that. Obviously, the childcare fees, which we think is hugely important, and then of course there’s household expenses which is a kind of grab bag of everything from personal hygiene to internet.

We don’t factor in what it costs to pay down on credit cards and things like that. Savings for retirement, owning a home, saving for your kids’ future education. You have a little bit of a cushion for emergencies, but not much.

Another thing I noticed in the report was information on childhood developmental factors and how those can improve as a family’s income does. Could you talk a bit about that relationship?

The evidence is pretty robust now. Families that can give them time, whether that’s helping with homework, whether that’s being able to take them to a sports league, whether that’s being able to enroll them in an art camp; if you’re working 70 hours a week, you’re not going to be able to do that. So, it’s not only about money, it’s also about the time that that money can give you with your family to develop those sorts of relationships. That has shown to be, unequivocally, a net positive for child development.

The income amount that was required in the 2016 report was slightly higher than the amount in the 2021 report, which was credited to increased government assistance. Could you explain how that comes into play?

As you sort of see the transfers increase, then [working individuals] don’t have to earn as much money in the private labour market. So, I think it really shows the positive impact that social programs can have on working families, and shows that when governments make these sorts of things priorities, they can change people’s lives.

Saskatchewan regularly ranks lowest or second lowest nationally on minimum wage rate. Why do you think that has been so consistent?

We’ve been very curious as to what was it that made them make this decision now. I wonder if they’re having trouble attracting labour, and sort of realized that if we don’t bring our minimum wage at least somewhat into equivalence with Alberta and whatnot, we’re just not going to be able to attract people to these lower wage jobs. That’s my suspicion, I have no evidence to prove it, but yeah. I think it’s a grudging recognition that having a low minimum wage, as much as the business community will say it’s attractive, it’s not attractive to workers.

One section of this report was on the benefits to businesses that pay a living wage. Could you expand on what they experience?

We’ve had living wages that have been instituted around the world, so we have fairly robust evidence as to what the impact is. What businesses that pay a living wage discover is they have much less turnover, people aren’t constantly out there looking for a higher wage job, therefore they don’t have to retrain. They have much less absenteeism, people aren’t taking the day off to go look for more work or things like that, and they tend to have much higher customer satisfaction. People – when they’re paid a decent, dignified wage – they tend to have much higher morale, they tend to be better employees.

There was also mention of benefits for businesses that advocate for progressive policy changes to balance with that living wage. How would that look?

Unfortunately, business usually lobbies against increased social spending on programs and whatnot, but what we’re sort of showing here is that when you have a program like the Universal Child Benefit, the amount of money that workers need to meet their basic needs from their private labour market becomes less. Granted, living wage isn’t instituted within Saskatchewan, but nevertheless it shows that your employees will benefit from these sorts of social programs, and it means that the wage packet or maybe the benefits don’t need to be as high.

This interview has been edited for length and clarity. The “Making a Living” report can be downloaded at policyalternatives.ca/publications/reports/making-living.