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Minimum Wage Hike

Does a higher minimum wage offer justice to all parties?

You might be paying more for fresh strawberries and tomatoes this summer, according to Canada’s Food Price report. Fruits and vegetables are increasing an estimated five percent this year due in part to unpredictable climate patterns. In Ontario, higher costs could be from the recent minimum wage hike, from $11.60 to $14.00 per hour, as business owners share the increased expenditure of higher wages with customers.

John Zekveld, owner of Zekveld’s Garden Market in Wyoming, Ont., was preparing for his seasonal employees to arrive when he spoke with CC. He has adapted to the new minimum wage rate by hiring fewer employees (more part-time and fewer full-time positions), increasing employee productivity and increasing the prices of fresh produce. “My direct labour costs are 30 percent of my expenses,” Zekveld says, “and will be going up 25 percent.”

The Toronto Star describes the minimum wage debate as one between workers and employers, between people who care about economic health and those who care about economic justice. If there are sides to the debate, you’ll find people from all perspectives within the Christian community, too. The largest and most recent increase in minimum wage rates happened in January in Ontario, and its implementation is being closely watched by the rest of Canada. There’s a wide range of rates nation-wide, with Ontario now having the highest and Saskatchewan and Nova Scotia having the lowest, at $10.96 and $11.00 respectively.

Will the new minimum wage in Ontario adversely affect small businesses and raise the cost of goods and services? Will money cycle back into the economy from the hands of low-wage earners? Will it help them transition from low to middle class? Economic patterns over 2018 will help determine some of those answers.

Who’s affected?

Roughly 800,000 Canadians work at or below provincial minimum wages, according to Statistics Canada. Women make up 50 percent of the workforce but hold a higher share, 58 percent, of minimum wage workers. Newcomers to Canada – defined as having arrived within the last 10 years – are also disproportionately represented, making up nearly 20 percent of the minimum wage workforce. A better minimum wage helps all disadvantaged workers combat income inequality. To accommodate it, however, business owners say that they’ll need to make staff cuts, reduce hours and benefits or increase prices to absorb the additional cost.

“Rooted in faith and guided by values,” the Christian Farmers Federation of Ontario (CFFO) advocates on behalf of 4,000 farm family businesses in the province, and it has raised concerns about Bill 148’s sharp wage increase. Last year, the CFFO “encouraged the government to reconsider their proposal” to increase minimum wage over two years and, alternatively, to allow wage increases “to be determined by the process government had already set in place in 2014: that wage increases occur at predictable times, based on the Consumer Price Index . . . [giving] small businesses time to adjust, to raise prices gradually or whatever they needed to do to still make enough to pay their employees.”    

In an interview with Christian Courier, Clarence Nywening, CFFO president and Thamesville farmer, said that “sudden changes like the one we’re experiencing in Ontario are hard on small and medium-sized businesses, including farms – especially ones that rely heavily on labour. For farmers, it’s especially difficult because usually they don’t actually have the power to increase their prices to cover higher wages, as might be possible for other businesses. A sudden jump in operating costs could mean losing a lot of the revenue they rely on just in order to keep their businesses going.”

Zekveld told CC that, “our culture describes business as rich people who owe society [a] share of its riches. Many times when we put a face or a story to a business, we see behind it a family that is also budgeting to tithe, to put food on the table, to pay the bills, to give to charity and in many cases of Christian families, to pay one or two Christian education tuitions. Much risk has gone into this investment to be able to hire workers and help other families put food on their tables. We need to encourage business to thrive and to expand and that will provide jobs.”

When minimum wage goes up, Nywening added, “often skilled employees earning above minimum wage also expect an increase. Done gradually enough, this can be managed, but when we crunched the numbers on our family farm given the drastic wage hike we’re dealing with, we found that purchasing some new machinery would cost much less over the long run than keeping our employees. This wasn’t an easy decision, but I have a responsibility to keep my farm economically sustainable.”

A Living Wage For All

While the wage hike might be tough for employers to swallow, it’s not a magic bullet for employees in the current gig economy. Even with a higher minimum wage, “temporary employment continues to increase, while high-quality full-time jobs are becoming increasingly scarce,” according to Citizens for Public Justice (CPJ). Precarious, low-wage work “prioritizes productivity over the health and well-being of workers.”

“The kind of jobs that Canada needs,” living wage advocates argue, “to build the kind of economy Canadians want, are not minimum wage jobs. The jobs we need are those that pay a wage sufficient to live an acceptable Canadian lifestyle.” Living Wage Canada defines this as “what earners in a family (defined as a healthy family of four with two children) need to bring home based on the actual costs of living in a specific community.” Nywening agrees that “living wage advocacy is important. . . . It also encourages employers to consider the benefits of paying above minimum wage for overall employee morale, training and turnover. Paying a living wage rather than the minimum wage shows an employer’s investment in their employee and their desire to maintain workers over the long term.”

While an increase in Ontario’s minimum wage could bring some wage earners in Ontario closer to earning a living wage, the $14.00 rate falls short in many Canadian cities. According to Living Wage Canada, a living hourly wage in Toronto would be $18.52. In British Colombia, a Living Wage Policy was adopted by the following municipalities: City of Vancouver workers, with security officers and custodial staff feeling the increase more substantially ($20.64 hourly); Quesnel municipality city workers and service providers ($16.52 hourly); Ucluelet First Nations government workers ($20.11 hourly). Ucluelet First Nation president Les Doiron comments, “The cost of living is extremely high where we live, and I wanted to ensure our people do not suffer unfairly as a result.”

CBC interviewed several minimum wage workers at St. Francis Table, a Toronto restaurant catering to a low-income neighbourhood. Peter Jecchinis, 51, a temp agency worker, shares his insights on living on minimum wage: “Well, you can exist, but you can’t necessarily ‘live.’. . . You need a little more to get by. It’s tough. You have to really skimp on everything. Clothes. Food. But you don’t have extra things, and a man does not live by bread alone. You need recreation. You need a little extra, other than just paying your bills. Why not go to a movie once in a while; why not go to a ballgame once in a while? Is that too much to ask for someone who is putting in [full time] hours, no matter what they are doing for a living?”

Let Justice Roll Down Like Waters

The concept of minimum wage was first introduced in 1918 in Manitoba to protect women and children from exploitation. “The heart of the increase,” explains Carleton University professor emeritus Allan Moscovitch, “is the political issue of social fairness.” Today, CPJ reports that nearly half of the households in Canada below the poverty line have at least one person working: “a job on its own does not guarantee freedom from poverty.” Has the original intent of minimum wage been lost over the years? Will Ontario’s new rate begin to reconcile minimum wage’s lost identity?   

  • Candice is a freelance writer and editor. She lives in Bracebridge, Ontario with her husband and three children. Get in touch with Candice by emailing moc.liamg@yram.yerdua.ecidnac.

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