Workers Earning Minimum Wage in Nova Scotia Getting a Raise

Amid the current climate of cutbacks and austerity, there is some good news.  The Government of Nova Scotia, pursuant with the recommendations of the Minimum Wage Review Committee, will be increasing the province’s minimum wage as of April 1^st.  The 1.5 percent increase, from $10.00 to $10.15 per hour, is a small step toward a more vibrant, productive, and fair economy in Nova Scotia.

Minister of Labour and Advanced Education, Marilyn More, stated that, “Nova Scotians deserve to earn a fair wage for a fair day’s work.”  While the Minister’s sentiment is correct—hard work deserves fair wages—there is much more to be done if all Nova Scotian families are going to share in the province’s growing prosperity.

Unfortunately, after reaching a 1976 value of $9.97 (2011 dollars) the minimum wage was allowed to shrink substantially, by more than 25 percent over the following 25 years.  However, with recent increases, Nova Scotia’s minimum wage is fast approaching its mid-1970s real value.

Despite this growth, and the province’s growing prosperity, low-wage workers have been left behind.  A recent CCPA-NS study explains that, had the minimum wage of the mid-1970s maintained its value relative to gross domestic product per capita, it would now be more than $15 per hour!

A fulltime minimum wage worker who misses no work days over the course of an entire year is still unable to adequately provide for a single-child family.  The minimum wage leaves a parent more than $4,000 short of the Low-Income Cutoff for a 2-member family outside of an urban area. (Inside urban areas the situation is even worse!)

Erosion of the minimum wage is particularly troubling when we consider that low-wage job growth has outpaced high-wage job growth by about 4 to 1 over the past 10 years.  With call centres and other low-skill service-sector employers dominating the job-market, it is especially important that the province continue to legislate wage increases.

With low-wage employment growing and leaving its victims more destitute, troubling social statistics prevail.  For instance, in 1998, only about 20 percent of children in poverty had at least one parent working fulltime, all year.  Now, that number is closer to 45 percent.

That is, almost half of Nova Scotian children living in poverty have a fulltime working parent (or more)!

While employers and their well-financed lobbyists contend that even minor increases in the minimum wage result in job-losses, this claim is disingenuous and, simply put, untrue.  A near consensus has been built among credible economists that modest minimum wage increases do not adversely affect employment, and actually raise the overall wage-bill.

Consider employers like JustUS! Coffee Roasters Co-op, who have instituted a pay scale that mandates a living wage for their café staff that is about 6 percent above the legislated minimum wage.  This company continues to thrive without condemning its employees to poverty.  JustUS! is also able to grow while fulfilling a mandate for fair trade, adequately compensating its suppliers for their hard work.

Not only should Nova Scotia continue to increase its minimum wage, it should also eliminate the $.50 lower training wage for employees who have yet to work for 3 months.  This scheme not only devalues the hard work of new employees, regardless of their productivity, but it also creates a disincentive for employers to commit to adequate training and invest in innovation.  The training wage motivates employers to profit from high employee turnover rates, rather than making their operations more efficient.  Public policy should not stymie growth and ingenuity.

In a province where the average student debt-load after completing four years of school is almost $30,000, young peoples’ work should be recognized for its full value.

The training wage is bad for workers, bad for employers, and bad for the province’s economy.

While the current government has shown a commitment to improving the lives of hard-working Nova Scotians, there is yet more to be done.  By making further increases to the minimum wage the province can move forward to an era where work pays and no one is left behind.

Increasing the minimum wage means more aggregate demand for local goods.  Lower-income Nova Scotians do not send their money to Toronto or New York where it will never re-enter the local economy.  By ensuring our most vulnerable citizens have decent wages, we are keeping those monies in the province.

Poverty costs Nova Scotia between $1.5 and $2.2 billion per year.  That means that increases in the minimum wage should be accompanied by other poverty-reduction measures.  We need to seriously consider raising all our labour standards, increasing income assistance, and assuring high quality public services through adequate funding.

When we increase the minimum wage we create a better province for all Nova Scotians—a province where everyone can share in growing prosperity.  Like Minister More said, Nova Scotians deserve to “earn a fair wage for a fair day’s work.”

Jason Edwards

Research Officer, CCPA-NS

Editor and Contributor, www.maritimeperspective.ca