When employment doesn’t mitigate poverty

Could it maybe have something to do with Saskatchewan having the lowest minimum wage in the country?

According to Statistics Canada data, in January of 2021, Saskatchewan had the lowest unemployment rate of any province at 7.2 per cent. While that is a lovely number, other Statistics Canada data also places Saskatchewan as having one of the highest overall poverty rates in the country and the third highest child poverty rate. This begs the question, with that amount of people employed, why are so many living under the poverty line?

I’m going to start with an adjacent question: what’s the current data on income for those in Saskatchewan? I will be using information from Paul Gingrich’s report Poverty in Saskatchewan – October 2020 update, which combines data from Statistics Canada’s 2018 Canadian Income Survey and the 2016 Census of Canada. The 2018 Canadian Income Survey doesn’t include data on individuals living on reserves, so the 2016 Census of Canada was used for information on First Nations and Métis individuals.

In 2018, the federal government established the Official Poverty Line (OPL), a measure for “goods and services a household requires to meet basic needs,” at $44,833 for a family of four and $22,416 for an individual adult. Make any lower than that per year and you’re under the poverty line – in Saskatchewan, there’s roughly 122,000 people under that line, or at least 12 per cent of our population (number does not include individuals living on reservations). To use an example that I’ve used in previous articles, that number is roughly half of Regina’s population, so take a second and actually picture what that amount of people looks like. Think about how many lives are actually being impacted here in a province with 7.2 per cent unemployment.

If you’ve read my pieces before then you know what comes next – let’s dig into those numbers a little deeper.

I found the numbers for two specific demographic groups to be the most telling in Gingrich’s report. First, the poverty rate for children living with single mothers is 48.4 per cent, compared to 8 per cent of children living with two parents. This difference makes sense when you consider that it’s a lot easier for two adults to make $44,833 per year than one, especially in a province where our minimum wage – the lowest in Canada – is $11.45 an hour. On top of putting time in to raise and care for children, run all the errands, and do the cooking and cleaning, these mothers would have to work two full-time minimum wage jobs to make an income anywhere close to the poverty line.

The fact that this makes sense is a problem. The fact that it’s so easy to understand why roughly half of children living with a single mother lives in poverty is – excuse me – absolutely fucked, because when you understand a problem like this you can’t stop at just understanding. Noticing a problem changes nothing; raising the minimum wage to a wage that an individual could support a family on would change things by at least ensuring single mothers would only have to clock in 40 hours a week to get their family’s basic needs met.

The other group I took note of was individuals between the ages of 18-64 who don’t live with families. Of this group, 35.5 per cent were below the poverty line, compared to 7.6 per cent of individuals who did live with families. The average income of that 35.5 per cent, or roughly 1 of every 3 people in that group, was found to be 45 per cent lower than the poverty line for individuals, meaning an average income of roughly $14,500 per year.

Again, a sizeable gap; again, it makes sense. When the cost for your vehicle and maintenance, housing and maintenance, education and/or student loan payments, daily costs, and everything else falls on you to take care of, it’s not likely you’ll have money left at the end of the month to put away if you’re only making $11.45 an hour. Some of the people in this group would be employed post-secondary students who don’t live with their parents or a family of their own, divorcees and bachelor-types who live alone, or middle-aged, widowed homemakers who are getting back in the work force with a two-decade gap on their resume.

Gingrich concludes his report by stating that “It is unacceptable for a rich province like Saskatchewan to have over 100,000 persons in poverty and another 100 thousand with relative low incomes. Improved social assistance benefits, universal child care, adequate house, a Living Wage, and a universal basic income could ensure that no child or adult lives in poverty.” It is unacceptable for a province with an unemployment rate like Saskatchewan’s to still have so many people unable to afford to meet basic needs for themselves and their families.

In an article for The Canadian Press on February 22, 2021, Brett Bundale reported on some of the factors that those who lost their jobs due to the pandemic had in common. He used a report on Statistics Canada data done by Benjamin Tal, the deputy chief economist at CIBC, which found that “Canadians who lost their jobs due to the recession sparked by the COVID-19 pandemic all had something in common: they made $27.81 an hour or less. But the biggest decline in work was among the country’s very bottom wage earners, with an hourly wage under $13.91.”

What this says to me is that the people working minimum and low wage jobs, the same jobs that last year were heralded as essential, are most likely to be hit hardest by this pandemic. An hourly wage of $13.91 is considerably higher than our minimum wage, yet it’s not a high enough wage to be able to save money – that’s a paycheque-to-paycheque wage, and the people earning those wages were those most likely to lose their paycheques.

The minimum wage, legally speaking, is the lowest amount most businesses can legally pay their employees, and some take advantage of that by choosing to cut wages to the lowest legal amount to cut costs and pocket more profit. While I understand that increasing the minimum wage could lead to job losses, I would argue that if you can’t pay an individual enough to meet their basic needs, you can’t afford to have someone working that position. You need to either rethink your business model or try cutting costs in areas that don’t directly harm the people working under you – AKA those who make it possible for you to earn what you do.