Saskatchewan minimum wage rises, but living wage gap remains

The province is raising the lowest-paid rate to $15.70 an hour on Thursday. It works out to an extra $14 in a 40-hour work week.

Saskatchewan has the second-lowest rate in the country for minimum wage.

Dr. Simon Enoch, senior researcher for Saskatchewan issues and policies at the Canadian Centre for Policy Alternatives, joined the Evan Bray Show to talk about the gap between minimum wage and livable wage.

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Listen to the full interview, or read the transcript below:

This interview has been edited for length and clarity.

Evan Bray: I know we’ve talked about this before, and this actually can be a fairly contentious discussion because you’ve got the people on the side of you need to be able to make enough money to live, and then you’ve got businesses saying with everything going on in the world right now they’re being squeezed at every angle, and so a significant spike in that minimum wage to the living wage could cause them a problem. How do you see this playing out?

Simon Enoch: I think that there’s a third option here, and that is to ensure that the cost-of-living increases aren’t solely put on the shoulders of either workers or employers. And this is where, you know, the government can really come in and do some good here. So the living wage rate, as we calculate it, is based on specific expenses that a family has to pay for in a certain city. If these costs come down, so does the living wage. Families don’t need to earn as much to meet these expenses. So anything governments can do to stabilize or reduce non-negotiable expenses. You know, whether that’s shelter costs, transportation costs, food prices, means that they don’t have to depend as much on employment earnings. So $10-a-day childcare is a great example, right? When the government implemented that program, our living wage rate actually went down because preschool childcare went from about $1,000 per month to $200 per month, thanks to that program. So, significant savings on a large monthly expense via that program, which actually brought the living wage down.

Can you talk about what you use in the calculation? Like, I know it’s things that are part of everyday life, housing. I’m assuming food is in there. What do you use to calculate what a living wage in a community might be?

Enoch: It’s very local-specific. It’s based on what it costs to live in a specific city, whether that’s Regina or Saskatoon. So, what does it cost to rent an apartment in Regina? What does an annual transit pass cost? What is after-school childcare cost in a city? So it’s a city-specific way of calculating what kind of hourly wage is needed to afford to live in these cities. But while it affords a sort of adequate standard of living, the living wage doesn’t include a lot of expenses that I think many families would take for granted. So there’s no money for retirement savings or for education savings, home ownership, or for credit card or debit debt payments; it’s based on a rather bare-bones expense list that a family of four would require to secure an adequate standard of living in either Regina or Saskatchewan.

I was going through the numbers, I was surprised to see Regina in front of Saskatoon, as I mentioned in my lead-up. The living wage in Regina is calculated at $22.50 an hour in Saskatoon, $21.50. What’s the difference there?

Enoch: It’s the first time that’s ever happened since we started calculating the living wage in 2014, and it’s driven primarily by Regina’s rental market; shelter costs increased substantially more in Regina rather than Saskatoon. The reason for that, I’m not quite sure, but it really did drive the living wage in Regina higher this year.

This discussion has got so many different angles to it, and I remember having this chat with a member of the provincial government one day around minimum wage, and this notion of living wage, and what I heard was that’s exactly why provincially they decided to take some steps for tax breaks. They made some changes to income tax rates and a number of things to try and help those lower income earners in our province. Does that factor into this at all, Simon?

Enoch: Absolutely. I mean, to a certain extent. I mean, I would say that people who are entirely dependent on the minimum wage aren’t really paying much in taxes, or what they are, they’re receiving more than they actually pay. So, tax breaks can help on the margins, but really, what we see as being the big driver is controlling those expenses, those non-negotiable expenses like shelter, transportation, groceries, things like that, and then government transfers. You know, ironically, one of the reasons for the higher living wage this year was the end of the carbon tax rebate, which for low-income families could be substantial, about $1,500 a year, which they no longer receive. So, any ways that governments can get more money into families’ pockets, tax cuts are a way to do that. But I think a much more effective way is via transfer programs.

I’m trying to get an entry-level worker; I can’t post at today’s wage increase $15.70 an hour and get someone. I’ve got to have that wage higher in order to be competitive. Do you measure, at all, the number of minimum-wage jobs there is in a jurisdiction?

Enoch: We know that there are over a million minimum wage workers in Canada as a whole. I don’t have specific numbers for Canada or for Saskatchewan, but certainly we do know that one of the benefits of a living wage is you get when you pay your workers a living wage. There’s a lot less churn. There’s a lot more retention. You know, people aren’t looking for a way out. They’re not looking for a higher-paying job as they might be if they’re in a minimum wage position. So employers get that long-term security and long-term tenure from their employees when they do pay a living wage.

Another topic that often comes up when we’re talking minimum wage is some people will draw a distinction between a 15-year-old kid working in a fast food restaurant and a 32-year-old mother of two working as a night worker, for example, at a I don’t know a pick a pick a spot a hotel or something like that. Is there some provinces? My understanding is some provinces will actually draw distinction between students and full-time employment.

Enoch: There certainly have been tiered wages, particularly with regard to the service sector in some provinces. You know, it’s very difficult and kind of I think onerous to base the wage you pay someone on their position or their you know, what are you going to do, a questionnaire? Like do you really need like is this a part time job do you live at home I mean you get into all sorts of bureaucratic weeds trying to distinguish that at the end of the day unfortunately more and more adults and older workers are receiving the minimum wage, so it’s certainly not a wage that’s only given to students that live with their parents. I think those students, their parents deserve a dignified standard of living. They might be saving for a home. They might be saving for university. You know, everyone deserves a unified wage. At the end of the day.