According to new CCPA-NS publication Nova Scotia's low minimum wage contributes to poverty

May 8, 2002

Halifax: According to a publication released today by the Canadian Centre for Policy Alternatives - Nova Scotia (CCPA-NS), the Nova Scotia real minimum wage has decreased by more than $2.00 over the past 25 years. The study, Undermining Wages in Nova Scotia: The Minimum Wage from 1976 - 2002, finds that the current minimum wage buys almost 30% less than it did in 1976 and this has contributed to the number of "working poor" in Nova Scotia. The study examines the wages of all Nova Scotians relative to the minimum wage and finds that the legislated minimum wage has an impact well beyond workers earning the current minimum wage of $5.80 per hour.

According to the authors, Thom Workman (Dept. of Political Science, University of New Brunswick), and John Jacobs (Director, CCPA-NS), business leaders and politicians focus the minimum wage debate on workers earning $5.80 per hour. But such a focus only addresses part of the overall impact of the minimum wage. According to the researchers, "the minimum wage acts as a benchmark wage, if the wage increases, other wage rates across the province will be pressured to follow suit." The setting of the minimum wage, according to Workman and Jacobs, "is a part of the overall struggle between workers and their bosses over wages rates. A low minimum wage favours low wage employers and allows overall wages to stagnate. It ensures that wages remain low, the working poor continue to fall behind, and inequality increases in Nova Scotia."

The researchers found that many Nova Scotians work for close to the minimum wage. "In 1999, one in four wage workers earned less than $8.00 per hour, at least half of workers earned less than $11.40 per hour. A disproportion number of these low wage workers are women. These wages do not lift families above the poverty line."

The study shows that the provincial government can, without significant costs to the provincial coffers, improve the plight of the working poor by legislating a substantial increase in the minimum wage. According to Workman and Jacobs, research shows that such increases do not significantly effect the number of jobs. This increase will, say the authors, go a long way to addressing the poverty of many households and children.