'It's nowhere near high enough': Sask. minimum wage second lowest in Canada

SASKATOON -

On Tuesday the province of Ontario raised its minimum wage to $15 an hour, which is tied for fifth highest in the country, according to retailcouncil.org.

On Oct. 1, the minimum wage in Saskatchewan increased by $0.36 to $11.81 an hour, which is the 13th increase since 2007 according to the Government of Saskatchewan.

“I feel like it definitely could be bumped up a little bit,” said Crystal Smith, a server at Crazy Cactus and Crackers in Saskatoon.

“I live mostly off of my tips as a server. My cheques I usually just use as rent, and then the rest is the cash that I get.”

Smith, who moved to Saskatoon from North Battleford last year, says she’d like to see the minimum wage increased to $12.50 an hour.

“I would be living a lot more comfortably. I've been putting off getting my cat fixed, because I don't have the money to go to a vet for that and I have no form of insurance really,” she said.

“I'm very lucky my mom's the landlord of the condo that I'm living in, so she's let me cut by or be late for rent a couple months because I have had to be, but she's been very understandable with that.”

Alisha Esmail, who owns Road Coffee in Saskatoon, says it’s important as a business owner to pay employees enough so that they’re not stressed about finances.

“It's definitely challenging to try and balance needing to pay your employees well, but also build the company up,” she said. “But I think healthy people build healthy companies.”

Esmail says she’ll generally start new employees at $15 an hour depending on their experience level and bump them up from there.

“If employees and your teams aren't stressed about their finances and they have what they need to live and develop their own personal life, then they're going to bring their best to the company and be able to invest more within the company, and so I'm a big proponent and paying your employees well.”

“It's nowhere near high enough,” said President of the Saskatchewan Federation of Labour Lori Johb.

“It needs to be probably double—would at least get it close to the cost of living in the major centers in our province.”

“I think Regina and Saskatoon are closer to $18 or $19 an hour to even be able to make ends meet. So not quite $12 an hour doesn't come close.”

Associate professor of economics at the University of Regina Jason Childs says big jumps in wages are seldom viable.

“You’d see one of two things; either you're going to see a lot of inflation, or you're going to see a lot of businesses close,” he said.

“A lot of businesses, particularly in industries like hospitality, tourism, bars and restaurants, that kind of thing, they're living on pretty thin margins as it is.”

“Let's say you're running on a two per cent margin, 50 per cent of your costs are wages, right? You increase wages by 40 per cent, you're done. You're now underwater.”

Childs says increasing the minimum wage is about weighing the costs and benefits, but says there are other solutions for workers at the bottom of the pay-scale.

“There are more efficient, less damaging ways to do it, and one of those less damaging ways to do it is an earned income tax credit,” he said.

“Make it fully refundable, because that's going to do more for helping that person out, and less to reduce the opportunities that new entrants to the labor force have.”

A Government of Saskatchewan email to CTV News said each increase to the minimum wage is calculated based on the formula in The Minimum Wage Regulations, 2014.

This formula gives equal weight to the percentage change in the provincial Average Hourly Wage and the Consumer Price Index for the previous year as published by Statistics Canada.

Johb says the formula for the Consumer Price Index is now outdated.

“When they originally put it in place, it was something that probably was working a little bit better for the times and it would adjust small amounts often,” she said.

“We do see a couple of times a year or minimum wage gets a boost, but it's just pennies, really.”

Childs says minimum wage also moves every year with a measured rate of inflation.

“We only update it once a year or so,” he said. “If inflation starts to run away from us, like it is doing sort of right now, waiting a year to get that catch up is going to be really difficult and painful. So there is that problem.”

Johb says recently, the COVID-19 pandemic has exposed Saskatchewan’s minimum wage to be too low, and why some were content to collect payment from CERB rather than work.

“I've spoken with lots and lots of people during the pandemic. Pre-pandemic folks were able to work two or three jobs, and that way they could make a decent living,” said Johb.

“But once the pandemic hit, they were no longer able to work in more than one place, so that really hampered their ability to make a decent income.”

Johb says there’s no worker shortage in the province — there’s a wage shortage.

“There's been many studies that have shown that raising the minimum wage does not actually hamper a business,” she said.

“Mom and pop shops are paying more than minimum wage, because they realize the value of keeping their employees, and an employee that feels respected and appreciated is much is a much happier worker.

“It's the larger corporations that like to stick to the minimum wage, the lowest that they can possibly get away with, and they also don't offer full time employment, so workers are not only working for a low wage, but they're not able to work a full time jobs where they might access some benefits as well.”