Minimum
Wage
Questions
& Answers
1. The Province thinks that Ontario's minimum wage is fair. Is it?
No. Most minimum wage workers in Ontario make only $6.85/hour. For a person working 35 hours per week, that translates to approximately $12,500 annually or almost $7,000 below the poverty line. In 2001, it amounted to less than 40% of average earnings. Many people don't even make $6.85. For example, the minimum wages for students under 18 and restaurant wait-staff are $6.40/hour and $5.95/hour respectively.
2. How many people work at the mimimum wage?
While a relatively small number of workers, about 4.5% in 2000 , work for the minimum wage, a significant number earn wages that are close to it. In 2000, approximately 1.2 million workers in Ontario were in jobs that paid less than a poverty-level wage. Given the lax enforcement of employment standards laws, there are undoubtedly many workers who are paid less that the minimum wage.
3. Who is most disadvantaged by a low minimum wage?
Women, immigrants and visible minorities are over-represented in Ontario's low-wage workforce. In 1999, women represented 60% of all workers earning below poverty level wages. 31% of visible minorities and 41% of recent immigrants are forced to work in jobs that pay less than poverty level wages. However, a low minimum wage affects everyone by undercutting wages generally.
4. When was the last time the Province raised the minimum wage?
The provincial government raised Ontario's minimum wage from $6.70/hour to $6.85/hour in January 1995. Due to inflation, the minimum wage has lost over a dollar in purchasing power since 1995.
5. Have other provinces raised their minimum wages?
Yes. In fact, all other provinces and two out of three territories have raised their minimum wages since 1998. Most have raised their rates since 2002. Ontario went from having the highest minimum wage in 1995 to placing fifth in the country in 2003.
6. The Province argues that raising the minimum wage will actually hurt low income workers because employers will cut positions. Is this true?
This is a controversial issue. A number of Canadian and American studies have shown that raising the minimum wage would have a minimal impact on employment levels. Factors such as the business cycle, economic growth and labour supply are far more important than the minimum wage in determining employment levels. These studies have shown that raising minimum wages is not the "job killer" the Province and conservative economists claim it to be. If this were true, countries in the southern hemisphere would have full employment rates. This is not the case.
We have to resist the argument that minimum wage workers have to choose between a decent wage and a job. The "job killer" argument has been used over and over in the past against any attempts to regulate the economy - child labour laws, workplace safety legislation, the eight hour day, maternity leave and paid holidays, to name a few.
7. Will raising the minimum wage hurt small businesses?
Raising the minimum wage will put more money into the hands of low income individuals and families who will then spend that extra money, putting millions of extra dollars into local economies. Unlike the wealthy, whose tax cuts go into foreign luxury items and off-shore investments, minimum wage earners spend their extra cash at local small businesses.
Also, the idea that minimum wage employers are small family businesses struggling to survive is a myth. In 2000, 71% of low wage jobs where in businesses with more than 20 employees; 40% were in businesses with over 500 employees.
8. How does the minimum wage affect social assistance rates?
Current social assistance rates in Ontario are nowhere near what people need to cover basic necessities such as food, rent, utilities, clothing and transportation. The minimum wage effectively acts as a "ceiling" for social assistance rates - provincial governments stubbornly refuse to set benefit levels higher than the minimum wage. An inadequate minimum wage means inadequate social assistance rates.
9. What should the Province do?
In Ontario, a person working 35 hours per weeks would need to make $10/hour to come close to the poverty line. While this is not an adequate wage, raising the minimum wage to $10/hour would be an important first step toward ensuring the right of all workers to an adequate standard of living.
10. What can you do?
Call or write Brad Clark, Minister of Labour (416-326-7600) and tell him to immediately increase the minimum wage to $10/hour.
You should also call
your local MPP. To find his/her number, call Queen's Park at 416-326-1234
or 1-800-267-8097.
Source: John Fraser, Income Security Advocacy Centre
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Page last updated Sept. 18, 2003