N.S. Review Committee Recommends Dramatic Increases To Minimum Wage
HALIFAX — Nova Scotia’s Minimum Wage Review Committee has recommended boosting the province’s minimum wage to $15 an hour by 2024.
It also says the province needs to fundamentally change the formula it uses to calculate increases so the wage grows faster than inflation.
Under today’s formula, the committee argues, people earning minimum wage are getting shut out of the province’s economic growth.
Many People Making Minimum Wage Are The Only Earner In Their Family
In its latest report on minimum wage in Nova Scotia, the committee lays out a case for a dramatic increase to the province’s minimum wage.
It points out that more than 16 percent of minimum wage workers in Nova Scotia are the sole income earner in their families. Almost two-thirds of them are also renters.
Those people, the committee argues, can’t afford rent “without undue pressure on their income–affecting their ability to pay for essentials such as food, clothing, and transportation.”
The committee argues many people who earn minimum wage will continue to live below the poverty line if the province doesn’t change its approach to minimum wage.
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The committee also argues pegging minimum wage increases to inflation doesn’t do enough to help minimum wage earners keep up.
In Nova Scotia, from 1990 to 2019, the gap between average household income and inflation has gradually widened.
The economy tends to grow at a faster rate than inflation and that means minimum wage earners don’t get to share in that growth.
Pegging minimum wage to inflation lets people earning minimum wage keep up with the cost of living. But the committee argues the wage should be increased above and beyond inflation “to account for the ongoing economic growth of the province.”
That would mean adjusting the minimum wage based on inflation, plus another one percent to account for economic growth.
Its full plan looks like this:
- An increase to $13.60 per hour on October 1, 2022;
- An increase to $14.30 per hour on April 1, 2023;
- An increase to $14.65 on October 1, 2023;
- An increase to $15.00 per hour on April 1, 2024;
- Then, starting April 1, 2025, an annual adjustment based on the percentage change in the projected annual Consumer Price Index, plus an additional 1 percent.
Increases Must Be Predictable
While there is a clear appetite on the committee for a dramatic minimum wage increase, its report also points out that increases must be predictable so businesses can plan appropriately.
In an interview with Huddle after a previous minimum wage report, committee member Wes Surrett said many businesses are actually OK with a higher minimum wage as long as it isn’t sprung on them.
Surrett spoke as the general manager at the Pictou Lodge Beachfront Resort and not on behalf of the committee.
Most businesses budget far in advance (his hotel, for example, sets rates a couple of seasons in advance) and sudden changes in minimum wage can throw a major wrench into their budgets.
“It’s really hard for businesses to try to adapt to that, especially ones that have a large portion of their employees that are near that minimum wage level,” Surrett said. “The concern from employers is that they need to be able to forecast out those increases.”
He argued many independent businesses like his won’t object to a rising minimum wage, as long as they have ample notice.
“I think most employers would agree that as long as it’s predictable you’re able to absorb those costs into your operations. I don’t think anybody’s going to fight a minimum wage of $15, or whatever it may be. It just needs to be predictable so businesses can plan around it,” he said.
Houston Hints He’s On Board
The question now is whether the provincial government will accept the committee’s recommendations.
Speaking to reporters on January 13, Premier Tim Houston didn’t appear to take issue with the committee’s report.
“The world changes; the circumstances always change and the situation facing Nova Scotians today is different than the situation facing Nova Scotians 10 years ago or five years ago or even two years ago,” he said.
Houston said there are “high-quality” people on the committee and that his inclination is to trust them and their recommendations.
“Governments should always come down on the side of respecting their recommendations, as opposed to undermining,” he said. “My inclination is not to undermine that work but to accept that work”
Houston said his government will take “a short bit of time” to make its decision
In an email to Huddle, a government spokesperson said the province will announce its decision on the recommendations of the Minimum Wage Review Committee “in early February.”
Trevor Nichols is the associate editor of Huddle, based in Halifax. Send him your feedback and story ideas: [email protected].