Set minimum wages above poverty line: Study

March 26, 2007

TORONTO – Not a single province in Canada pays a minimum wage that lifts working Canadians out of poverty, concludes a study by the Canadian Centre for Policy Alternatives.

Bringing Minimum Wages Above the Poverty Line shows that provincial governments have allowed the value of minimum wages to be eaten away by inflation for too long. Since 1990, their real dollar value has flatlined or increased only slightly in every Canadian province.

“Depending on where you live, working at minimum wage full-time, all year round, will leave you four to six thousand dollars below the poverty line,” says Stuart Murray, study co-author and researcher with the CCPA’s BC Office.

The study calls on provinces to raise minimum wages to $10 an hour (in 2005 dollars), which would put a single person working full-time just above the poverty line. It also calls for minimum wages to be indexed to inflation.

“Indexing minimum wages to inflation would stop governments from playing political football with peoples’ livelihoods,” says co-author Hugh Mackenzie. “It would ensure the real value of minimum wages is never allowed to erode to such indefensible lows again.”

Last week, Ontario announced plans to increase its minimum wage to $10.25 by 2010, arguing a more rapid increase would mean substantial job losses. But Mackenzie dismisses those claims:

“Don’t let anyone tell you the economy can’t withstand a decent minimum wage. This study reviews the evidence and finds that the minimum wage is, if anything, a bit player in determining employment levels. Ontario should move up its scheduled increases and then index to inflation.”

Raising provincial minimum wages would have a direct impact on the 19% of Canadian workers who currently make less than $10 an hour. Nearly half of them are over age 25, driving home the reality that this issue isn’t ‘just about teenagers’.

“This isn’t just a matter of principle,” says Mackenzie, “it’s a matter of financial survival for thousands of people and their families.”

The Centre recently released an Environics Research poll showing 88% of Canadians support raising minimum wages to help reduce Canada’s growing income gap.


For information, please contact: Trish Hennessy at 416-263-9896 or cell 416-525-4927 or Shannon Daub at 604-801-5121 x226 or cell 604-836-9372.