The recent announcement that Ontario is increasing minimum wage from $10.25 to $11 an hour has failed to satisfy anti-poverty organizations.
“I want to see those people out of poverty and moving towards a wage that is a livable wage,” said Ian Stumpf, the organizer for Kitchener-Waterloo Poverty Makes Us Sick.
Stumpf, among other lobbyists, were calling for a rise of minimum wage to $14 an hour, which the province denied.
The new wage will be effective as of June 1, 2014, after being frozen since 2010.
“Wage earners working full-time are living 25 per cent below the poverty line [with the current minimum wage rate],” Stumpf told The Cord. “A $14 minimum wage would bring workers 10 per cent above the poverty line.”
According to Stumpf, the increase only brings workers to a point where they stand 16 per cent below the poverty line.
“To us, the word increase would need to be used in the context of bringing workers to a fair wage,” he said.
However, Bruce Skeaff, a spokesperson from the ministry of labour explained that there is no official poverty line in Canada.
“You have to do things incrementally or else there is going to be a shock to the economy,” Skeaff said. “The panel that reported to us said that any increase from now on must be tied to the Consumer Price Index (CPI).”
The province has followed up on recommendations to tie future increases to inflation. However, there are additional concerns that a minimum wage increase may result in higher unemployment rates due to the employers’ inability to afford their workers.
“$11 an hour could be an issue for some businesses,” said Art Sinclair, the vice president of the Greater Kitchener-Waterloo Chamber of Commerce. “The argument from there would then be how many businesses would this threaten their financial viability to the point that they would have to cut back on hours or scale back on their operations in general.”
To Sinclair, there needs to be a balance between wages and employers’ expenses. He does not agree that $11 would have been an affordable increase from a business standpoint.
“$11 might be difficult, but $14 an hour is absolutely difficult,” he said.
Stumpf expressed his concerns that a majority of those earning minimum wage actually work under “large billion dollar corporations.”
However, the ministry of labour does not identify minimum wage hikes as the only mechanism for alleviating poverty in the province.
According to Skeaff, the government is developing a new poverty reduction strategy over the next five years.
When asked about an eventual cap on minimum wage increases, Skeaff explained that as the cost of living and CPI goes up, so will wages.
“If you were living in the 1970s when the minimum wage was below $2 an hour and you told someone that one day it would be $11 they would say ‘you’re kidding; no one will be able to get a job, no one will be able to afford anything.’”
“But here we are; whoever thought we’d get here?”