Managing Minimum Wage
By Lynne Bell
Recently, Saskatchewan's minimum wage increased from $10.50 an hour to $10.72 an hour. In this province, minimum wage adjustments occur annually. Any changes are announced by June 30 each year and take effect on October 1 of the same year.
This, says Saskatchewan's Labour Relations and Workplace Safety Minister, Don Morgan creates “a predictable system for employees and business owners.”
The province's legislation allows this yearly review of the minimum wage, which is based on changes to both the consumer price index and the average minimum wage.
Currently in Saskatchewan, there are just over 23,000 minimum wage earners. Just over half of them (56 per cent, according to the province's calculations) are under 25 years of age and they work mainly in retail, food services and other service industries.
Minimum wage is the lowest rate of pay per hour with which employers can legally compensate their workers.
Minister Morgan adds “Increases to the minimum wage, when combined with other supports and tax exemptions, help ease the financial burden for low income earners.”
So why is there an ongoing debate regarding raising minimum wage-both in Saskatchewan and elsewhere?
Well, even though the benefit to minimum wage workers is obvious, there is some concern from the small-business sector regarding any increase in wages, however small it may be.
An increased minimum wage has the potential to not only make a difference in the life of the employee earning it, but also to their family and their community-including the businesses around them-as their spending power increases.
And presumably, an increase in minimum wage wouldn't have a noticeably adverse effect on multinational chains-where many minimum wage workers toil.
Currently, the mininum wage in Saskatchewan is still much lower than the $16 per hour proposed rate of pay, which is is considered to be a living wage in this province.
However, for small local businesses-especially in the current economic climate-an increase of any kind (and however gradually it is implemented) may mean the difference between a business staying open or shutting down shop-and potentially putting their minimum-wage earning employees into an even more precarious position.
So what's the answer?
Well, one idea I encountered was the suggestion that employers of fewer than five staffers be allowed to claim a provincial business tax reduction to offset an increase in minimum wage, thereby creating a more equal playing field between large businesses (such as major chains) and smaller, independent operations.
The idea of increasing minimum wage-especially during the current economic downturn-is an ongoing argument that has supporters and detractors. However, ideas like this are the kind of creative thinking-and compromise- which may be necessary to ensure that both small business owners and their employees are not adversely impacted or pitted against each other during tough economic times.
Looking at minimum wage increases
By Kelly Running
Effective as of Oct. 1 was a minimum wage increase to $10.72 an hour.
“Increases to the minimum wage, when combined with other supports and tax exemptions, help ease the financial burden from low-income earners,” Labour Relations and Workplace Safety Minister Don Morgan said. “By annually reviewing the minimum wage, we have created a predictable system for employees and business owners.”
According to a press release there are approximately 23.200 minimum wage earners in Saskatchewan and the majority of these people are under the age of 25.
Canada in general, when compared to other first world countries, has a relatively low minimum wage. I remember travelling to Australia and being blown away by their minimum wage, which was around the $17 mark.
But, this meant subtle differences, especially in the food service industry, where in Canada it is typical to tip, while in Australia it is not common practice to tip servers. Relatives that I was staying with explained that because their minimum wage is so high in Australia that tipping servers was not customary.
When I first heard of the minimum wage increase, my thoughts went in a few different directions. I thought that it was good that those trying to earn a living on a minimum wage job would have the opportunity to earn a little bit more; but, then I thought about the small business that was struggling and what a wage increase would mean for them. In order to reach that minimum wage increase would they have to increase their pricing? Would they have to let someone go?
Small businesses have a profit margin that they need to achieve, but how much of an increase can they actually afford? It’s not that they don’t want to give their employees increased wages, it’s just that it might not be feasible for them to do so.
One question that I did come across, which made me think was this: “Is minimum wage a living wage?”
When you look at the statistics of those that are making the minimum wage, you are looking at younger people who are just starting off in a job. Is it the job that they’re going to do for the rest of their lives? Probably not, it’s likely an entry-level position, and as they find success are given promotions and raises.
When I was in high school and university my summers were spent working at Clancy’s on the Beach at Lac Pelletier – I recommend the homemade burgers or Egg’s Clancy although everything is good – but as I went back each year, I worked hard for them, and in turn they showed their appreciation through raises. My last summer there, in 2011, I was up to $11 an hour and was told that my work ethic made my efforts around the restaurant worth it.
So, although it’s good to have a minimum wage set, what is the right number? Not everyone necessarily deserves an increase if they’re not pulling the same weight as another employee in the same position. It’s a way to reward those that are working hard for you as an employer.
However, I know that in Australia a higher minimum wage works for them, but I do remember thinking things were rather expensive there… so, in the end, because minimum wage and cost of goods/services are related are we simply marking the numbers up but not really changing anything? If an employee makes more, but everything now costs more, are they really ahead?
