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By: Sid Ryan
Paid work should be a bridge out of poverty. But for many in Ontario, it’s not.
That’s because for nearly 300,000 workers, paid work means toiling at the minimum wage of $6.85 an hour, often at two or three jobs in an effort to subsist. And while the cost of bread, milk, housing and clothing has increased substantially, these folks haven’t had a wage increase in eight years. That’s eight years that coincide with a tax cutting, hard-line Tory government at Queen’s Park. Not since 1995, when the NDP was in government, did the working poor see an increase in their bottom line wages.
As a result, there are hundreds of thousands of individuals and working families in Ontario just scraping by. It’s a misconception to think that it is only teenage workers who earn minimum wage. The reality is that 61 per cent of minimum wage earners are adults and that 64 per cent of them are women. These adult workers, who support themselves and, in many instances, entire families, on subsistence wages, are falling below the poverty line.
That’s because in real value, after inflation, the minimum wage is in fact declining. Researchers estimate that the minimum wage is worth 11.4 per cent less today than it was 25 years ago. According to Falling Behind: The State Of Working Canada, a minimum wage worker earns a yearly salary of $12,248. That’s $2,000 less than what that same worker would have earned in 1976.
Studies also show that two parents, each earning minimum wage, would have to work full-time, year-round to earn more than welfare would give them.
The rise of low-paying part-time jobs, the eroded value of the minimum wage and cuts to government programs, are among the primary causes of hunger, increased poverty and homelessness in this province. Also, minimum wage earners are disproportionately represented in visible minority families and new immigrants.
Social development studies indicate that the depth of poverty across the country is not only increasing but that those who live in poverty are living below the income that is needed to have a decent quality of life.
While Canadian economic reports boast that there were thousands more jobs created in 2002, real wages are lagging. Forty per cent of these new jobs were insecure, part-time employment, and 17 per cent were in fact a form of self-employment.
In December, part-time workers earned an average of just $224.17 per week. Over the past year, the average hourly wage rose by just 36 cents per hour. That’s an increase of just 2.1 per cent at a time when consumer prices rose much faster, at a rate of 4.3 per cent.
Yes, there are more jobs. But they are not good paying jobs. As a result, working families, and in particular the working poor, are continuing to lose ground.
Ontario, too, is falling behind other economies in boosting the living standards of low-wage workers. In Washington state, the minimum wage is $7.01 (U.S.). That’s more than $9 Canadian. In Ireland, the minimum wage is $12 an hour.
Around the world, there is a renewed push for an increase in the minimum wage.
In Australia, advocates for the working poor are demanding a minimum wage of $12 an hour. Those calling for the hike have compared the whopping raises in the salary packages of company CEOs to the stagnant minimum wage. They found a massive increase in inequality. They found that Australia’s top 100 CEOs each garnered an average pay increase of 38 per cent amounting to $550,000 last year. The government has acknowledged that the wages of the working poor are too low and has agreed to a partial minimum wage increase.
But here in Ontario, instead of helping low-income earners, the Tories are doing their level best to ensure there is a steady supply of low-paid workers for employers, particularly in the high job growth service sector, to exploit.
In addition to freezing the minimum wage, this government has passed legislation that actually makes it harder for workers, particularly low-paid workers in precarious jobs, to join a union. It’s unfortunate, but not a surprise, that nearly one in three non-union workers in Ontario are in low-paid jobs. Compare that to just under 7 per cent of unionized workers who are deemed low-paid.
But there is hope. If the latest polls are right, the Ontario Tories are in trouble with voters. They may in fact be on their way out the door. It seems that the less government, more privatization policies of the Common Sense Revolution have not only been duds, they have proven punishing, unjust and hurtful. And Ontarians are catching on.
So far, the Tories are leaving a legacy of poverty and decimated public services. They can, however, in their last days, leave one good thing to the hard-working poor of Ontario — a solid increase in the minimum wage to a living wage of $12 an hour. And the minimum wage must be indexed to inflation, in order to prevent a further decline.
Raising the standard of living of our poorest workers is an important part of what governments must do to end poverty. Moral and ethical arguments alone justify the obligation governments have to those in society who are struggling.
But if that isn’t a convincing enough argument for the Tories, they should consider that higher working wages come back into the economy as purchases of goods and services. Without sounding too cynical, businesses will prosper if more workers have more cash in hand. In the end, by raising the minimum wage the Tories can score points with scads of voters. Low-paid workers will be glad to be getting a raise, while business will rejoice at more sales at the cash register.
Sid Ryan is the Ontario president of the Canadian Union of Public Employees.