Nova Scotians subsidizing minimum wage employers: report

May 25, 2005

HALIFAX: Nova Scotia has not had a real minimum wage increase in more than 20 years, according to a report release today by the Canadian Centre for Policy Alternatives – Nova Scotia (CCPA-NS).  “Time for a Real Raise: The Nova Scotia Minimum Wage,” finds that the stagnating minimum wage is contributing to poverty and the development of a low-wage economy in Nova Scotia. 

According to the author, John Jacobs, “when inflation is taken into account the minimum wage has not increased in almost 30 years.  In fact the buying power of the minimum wage is lower today than it was in 1975.  While the economy continues to expand the working poor have not reaped the benefits of this growth.” 

The author notes that  the impact of the minimum wage goes well beyond the 5.5% of the workforce being paid the minimum wage.  “The minimum wage is a point of reference for wage negotiations between workers and employers.  If the wage increases it puts upward pressure on other wages especially low wages.  If the minimum wage is allowed to stagnate as it has in Nova Scotia, other wages will stagnate.  The low minimum wage policy in this province is contributing to the number of working poor in the province.” 

According the Jacobs “ the minimum wage does not provide sufficient income to support an individual let alone a family.  Low wage workers face a growing poverty gap between the wages they earn and what it costs to run a household.”  “To some degree this gap is decreased” according to the report “by support from family and the community and by government transfers, such as the child tax benefit.”  In effect, according to Jacobs, “minimum wage workers, their families and taxpayers are subsidizing the employers who pay the minimum wage and low-wages in general”.  “We are” according to Jacobs “providing subsidies to a surprising number of very profitable companies such as McDonalds and Tim Horton’s restaurants and Wal-Mart stores.”

Nova Scotia’s low minimum wage policy is, according to the author, “contributing to a low-wage economy.  A disproportionate number of jobs are being created in low wage sectors such as the accommodation and food services sector – the sector which tops the list of industries in Nova Scotia that pay the minimum wage.”   

The report recommends that the Minister of Environment and Labour develop a long-term strategy that provides a minimum wage that closes the poverty gap.  In 2005 that would require a minimum wage of $8.20 per hour.  The strategy should also include measures for small businesses, such as temporary tax breaks and funding that enables firms to increase wages and productivity of workers, such as training and skills upgrading.

“Time for a Real Raise: The Nova Scotia Minimum Wage” is available from the CCPA web site at

For more information or to arrange an interview, please contact John Jacobs at 477-1252.