N.S. Committee Calls For Faster Path To $15 Minimum Wage
HALIFAX — Nova Scotia’s Minimum Wage Review Committee says the province should speed up its timeline for reaching a $15-per-hour minimum wage.
The committee, which is made up of both worker and business representatives, said 2022’s higher-than-expected inflation has caused more urgency in increasing the minimum wage.
Last year, the committee initially suggested reaching $15 per hour in April of 2024–followed by attaching minimum wage to a new formula (inflation plus one percent) in 2025.
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But when that recommendation was made, inflation for the years 2022 and 2023 was projected to be just three percent and two percent. Instead, 2022 was a horrible year for consumers, with inflation of about seven percent. This year inflation is projected to rise by four percent.
These numbers have led to a new recommendation.
The newest annual report, submitted this past December, wants the province to hit the $15 mark by October of 2023. It is also recommending an increase to $14.50 per hour three months from now. The current minimum wage is $13.60 an hour–one of the lowest in the country, second only to Manitoba ($13.50 per hour). The report also recommends implementing the inflation plus one percent formula a year earlier.
“Any increase in the minimum wage that is matched by an increase in inflation results in no increase in purchasing power for the minimum wage earner,” notes the report, which was released publicly on Thursday. “Due to the unforeseen and significant increase in inflation for the 2022 calendar year – and what is now forecast for the 2023 calendar year – the increases to minimum wage recommended in the December 2021 report will not have the expected impact on the purchasing power of minimum wage earners.”
In December 2021, the review committee noted that without serious changes to the minimum wage, there would be workers living below the poverty line. It also noted that businesses need a predictable minimum wage model so they can adjust expenses accordingly.
“Without a change to the approach to setting minimum wage, there will continue to be a number of minimum wage earners who live below the poverty line and struggle to make ends meet,” it reads. “Concerns were also expressed that increases in the minimum wage rate be predictable and that employers receive notice of increases so that they can structure their practices to best absorb the increase in the cost of labour.”
According to the report, seven percent of Nova Scotians worked for minimum wage between April 2021 and March 2022. Most worked in retail, food, and accommodations.
“Sixteen-point-six percent of minimum wage earners in Nova Scotia live alone or are the single income earner in their family and that 62.1 percent of this subset of minimum wage earners rent their living accommodations,” notes the report. “These minimum wage earners are unable to afford rent without undue pressure on their income – affecting their ability to pay for essentials such as food, clothing and transportation.”
Any increase in minimum wage comes at a time when small businesses are facing more financial pressure. Now that the calendar has turned over to 2023, businesses are paying more toward CPP and EI. On top of that, the end of this year marks an important deadline to pay back CEBA loans.
Halifax Chamber of Commerce CEO Patrick Sullivan said it will be tough for some smaller businesses to absorb the combined $1.40-per-hour increases if the recommendations are implemented.
“It’s going to be tough for employers who pay minimum wage. I appreciate that It’s tough for the employees that earn the minimum wage as well. But I suspect what will happen is much of that increase will be passed on to the consumer,” Sullivan said in an interview with Huddle.
“Many of the members of the Chamber of Commerce pay well above minimum wage. So I have to admit it’s not as big an issue for many of our members. But for the smaller members, I expect they will have to pass on the costs immediately. And if there is an employee who’s earning close to minimum wage, I think their expectation is that they will have an increase as well.”
Both Sullivan and the review committee believe there is a way government can help low-wage earners without relying fully on raising the minimum wage: by raising the personal income tax exemption in the province. Right now, Nova Scotia only protects the first $8,481 of someone’s income from being taxed. The federal amount, however, is almost double that, at $15,000.
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].