Minimum wages creep back to 1975 level

A minimum wage job pays roughly the same now as it did in 1975 after fluctuating lower in the 1980s and 1990s, according to a study by Statistics Canada.

The average minimum wage in Canada in 2013 was $10.14 an hour, while the 1975 minimum wage expressed in today’s dollars averaged out to $10.13.

That means workers in minimum wage jobs have gained only a penny an hour in purchasing power in 40 years, said Erin Weir, an economist with the United Steelworkers.

“We’d like to think that people get better off over time, but that hasn’t happened,” Weir said, pointing out that some expenses, such as rent and utilities may have increased faster than the consumer price index used to measure inflation.

Many provinces have now indexed minimum wage to inflation, meaning those working for the lowest wages won’t fall further behind, but Weir said there is no reason provincial governments can’t raise their minimum wages by more than inflation.

“Another point would be to improve labour legislation to make it more practical for workers to join unions and bargain collectively for better wages,” he said.

In 1975, the actual minimum wage ranged from $2.15 an hour in New Brunswick to $2.75 an hour in British Columbia, with an average of $2.60. In 2013, the minimum wage ranges from $9.95 in Alberta to $10.54 in Yukon, with Statistics Canada pinpointing the average at $10.14.

Lowest paid fell behind in 1980s

Between 1975 and 1986, what those in the lowest-paid jobs earned declined from $10.13 to $7.53, before increasing to $8.81 in 1996 and to $8.50 in  2003.

Weir said that decline in wages resulted from a swing to the right in Canadian governments, with provinces failing to raise their minimum wage for years.

“There was an ideology that government shouldn’t try to regulate the labour market. That was a mistake,” he said.

Business leaders say that raising the minimum wage leads to fewer job opportunities – a claim made as consistently in 1975 as it is today.

But more people made minimum wage in 2013 than 15 years ago, according to Statistics Canada – about 6.7 per cent of the workforce, compared to five per cent in 1997. In Prince Edward Island 9.3 per cent of workers were in minimum wage jobs and in Ontario, 8.9 per cent earned the minimum wage. That compares with just 1.8 per cent in Alberta.

Young workers, the less-educated and those who work part-time were most likely to be paid minimum wage. In retail, 17 per cent of employees earned minimum wage and in accommodation and food services industries, the rate was 27 per cent. Many of the new jobs created over the past 20 years have been in the service sector.

What Next?

Recent Articles

Leave a Reply

You must be Logged in to post comment.