02/05/2014 05:08 EST | Updated 04/08/2014 05:59 EDT

Working at the Minimum Keeps People in Poverty

How is it that people with higher wages deserve an increase, but those at the bottom do not? It is hard to believe the Panel suggests that people living in poverty, unable to pay rent, buy food, or heat their house are reaching a 'minimum standard of living'.

The news is rife with hype about the minimum wage lately and with good reason. As Ontario considered options to increase the minimum rate everyone wanted to have their say -- economists, think tanks, non-profit organizations and business leaders. What could have been an opportunity to focus on the people who earn this wage and the impact of an increase instead became a battle of numbers; one that left no clear victor.

Following province-wide consultations, the Ontario government announced last week that it will be raising the minimum wage to $11/hr on June 1st of this year, indexing it to the rate of inflation annually, and initiating a 5-year review process. As a result, Ontario will have the highest minimum wage (alongside Nunavut) in the country, and the minimum wage will likely increase in step with the cost of living. This is following a three-year freeze that kept the rate at $10.25/hr - 21% below the poverty line. The $0.75 increase is a welcome shift based on the rate of inflation since 2010. The downside is that this modest increase will mean that minimum age workers who work full time will still be 16 per cent below the poverty line, maintaining a population of working poor. While future annual increases will be tied to the Ontario Consumer Price Index (CPI), the 6.7 per cent increase on June 1, simply brings minimum wage workers back to 2010 purchasing power levels, leaving opportunities for savings and debt repayment off the table.

It's a step, but just a step. Advocates wanted more and business feared the worst when the news was announced. The outcry from some businesses was expected: a minimum wage increase would mean fewer jobs and hours of work for those making the minimum wage, and a direct impact on their bottom line. Higher unemployment rates would be a natural result some said.

Despite arguments against minimum wage increases from some businesses, experience in Canada tells a different story. Recently it was highlighted that a number of provinces have seen positive employment numbers following an increase to the minimum wage. This includes B.C., Alberta, and Quebec who in the past 5-10 years have raised rates that have not negatively impacted jobs (with the exception of 2009 following the recession). Ontario is part of this trend and between 2007-2010 the province was able to raise the minimum wage without having a deleterious impact on employment levels.

Throughout the debate about the minimum wage what has been most shocking is how easily it is forgotten (or pushed aside) that the minimum wage is not just about numbers or bottom lines, it's about people: people who do the work to ensure businesses run; and people who prop up and boost business when they act as consumers. Minimum wage workers actually spend the majority of their money locally, in their communities. So an increase in income will have a direct impact on local business.

Currently, forty percent of people above the age of 25 are working in minimum wage jobs in Ontario. These workers are more likely to be women, racialized people, persons with disabilities and recent immigrants. Kudos to CBC's The Current and the Toronto Star which featured the story of an immigrant woman who had to work multiple jobs just to feed and take care of her family. It was a stark reminder, and one of the few, that when only considering the bottom line some people get left behind.

More than that, these are mothers, fathers, community members and people with families. Sure, there are students earning the minimum wage too, but that is not an adequate argument against a wage increase as some economists note. In fact, Ontario has a student minimum wage for employees under 18 years of age that is separate from the new $11/hr rate. This group of young workers will see an increase in their pay scale as well from $9.60/hr to $10.30.

The final report from the Ontario Minimum Wage Advisory Panel, states that the purpose of the minimum wage is to, "create a wage floor for the labour market, and to ensure a minimum standard of living for employees." Considering this, should the government and business not work together to ensure all individuals working are above the poverty line? How is it that people with higher wages deserve an increase, but those at the bottom do not? It is hard to believe the Panel suggests that people living in poverty, unable to pay rent, buy food, or heat their house are reaching a 'minimum standard of living'.

In the end there has been some positive movement that must be acknowledged, but further steps to reducing working poverty and inequality remain. The government can continue to support this move by creating an affordable early child development and housing strategy -- two of the most expensive budget items for families. Perhaps it is also time to change the tune when thinking of the minimum wage and look beyond profit yields to the people who make that happen. They are no less than our neighbours, friends and community members, not to mention the foundation of the economy.


Photo gallery Minimum Wages Around The World (2013) See Gallery