This October 1, Saskatchewan’s minimum wage will increase by 35 cents—from $15 per hour to $15.35. This very modest increase will move us ahead of Alberta’s $15 per hour, giving us sole possession of the second-lowest minimum wage in all of Canada, which isn’t much reason to celebrate.
This year’s increase is due to the Saskatchewan government’s decision to index the minimum wage to inflation via the consumer price index. And while this is an important policy to ensure that minimum wage workers earnings are not significantly eroded by cost-of-living increases, no amount of indexing can rescue a minimum wage, like Saskatchewan’s, that was already wholly inadequate to begin with.
As CCPA senior economists Marc Lee and David Macdonald’s recent update to the rental wage demonstrates, residents of both Saskatoon and Regina would have to earn far above $15.35 per hour in order to be able to afford a one-bedroom apartment. The rental wage, which is the hourly wage needed to afford rent while working a standard 40-hour week and spending 30 per cent of income on housing, is calculated at $22.72 per hour for Saskatoon and $22.67 per hour in Regina. In effect, a worker earning the minimum wage in Saskatchewan would need to work one-and-a-half minimum wage jobs to reasonably afford a one-bedroom apartment in either city.
Like the rental wage, a living wage calculates what people need to earn based on the actual costs-of-living in their respective cities. The living wage, based on the expenses of a working family of four, is estimated at $18.50 for those residing in Saskatoon and $18.05 per hour for those in Regina. Once again, the Saskatchewan minimum wage is found wanting in comparison to what it actually costs to live in Saskatchewan’s major cities.
To add insult to injury, low-income earners in the province will also disproportionately feel the effect of the end of the carbon tax rebate. Due to the loss of the Climate Action Incentive Payment that accompanied the carbon tax that the Saskatchewan government fought so hard to defeat, low-income earners in Saskatchewan will be even worse off this year – with some families losing up to $1,500 in annual rebates now that the carbon rebate is no longer.
The government is always quick to brag about how attractive our province is to business, providing tax breaks, royalty holidays, footloose regulations and a host of other incentives to entice business to locate here. It is apparent that the same desire to attract business does not extend to workers, which is ironic, given the government’s constant fear of labour shortages.
The notion that maybe having the second-lowest minimum wage in the country might be a disincentive for workers to come here is rarely entertained. Even though we know that the greater the mismatch between the minimum wage and the ‘reservation wage’—the wage at which job seekers are willing to accept a position—can contribute to elevated levels of labour shortages in certain sectors, particularly retail, accommodation and food services where the minimum wage is often the starting wage. Saskatchewan may continue to experience higher vacancies in these hard-to-staff sectors if it continues to lag the rest of the country in minimum wage levels.
Maybe it is time for our government to think about how our province can be a bit more attractive to workers and whether the second lowest minimum wage in Canada is helping or hurting our appeal.
