Minimum wage increase advocates have been fighting for $15 for years – in fact, #FightFor15 has become their slogan. And Ontario, Canada, is the latest entity to enact a plan to raise the minimum wage to $15 per hour, a plan which Premiere Kathleen Wynne wants to see enacted by 2019. According to Macleans, a higher wage is absolutely necessary; nearly 30 percent of Ontarians in the labor market earned under $15 per hour in 2016, and Canada has been running a low-wage economy for decades, relative to the rest of the world, including America. Ontario leads the pack there, too, with more low-wage jobs than any other province.
But will $15 really be enough? The numbers suggest that it won’t be.
Fight For Fifteen is a great slogan. It’s alliterative, it trips easily off the tongue, it sticks in the mind, but it started in America, and it’s predicated on several things. It’s a number determined in American dollars, for American tax brackets, wage deductions, and cost of living (the number is actually tied roughly to the CPI – the Consumer Price Index.) It’s also based on the fact that the federal minimum wage in America is currently $7.25 and $15 will be a major increase – by comparison, Ontario’s current minimum wage is $11.40. Not to mention that the Canadian dollar is currently worth some $0.74 of the U.S. dollar: an increase to $15 is comparable to an increase to $11 in the United States.
And all of that is a problem.
It is readily apparent that Ontario’s wage hike, while welcome, was a political move, almost exactly one year before Ontario’s next provincial election, in which Kathleen Wynne’s Liberals are expected to perform poorly, and the $15 figure was picked as the figure of popular demand on social media. In actual fact, $15 per hour is probably going to fall well short of most Ontarians’ needs.
So, starting from the bottom, if we assume a full 44-hour work week, gross salary at $15 per hour is $34,320 – and that seems pretty good, on the surface. But after deductions for income tax, Canada Pension Plan, and employment insurance (social security) that drops to just a bit over $25,000.
Now, consider cost-of-living. If we take Hamilton as an average for urban living, and it more or less is, a single person (according to Numbeo) is estimated at $900 per month before rent, a family of four is at $3,300 before rent, and that’s not considering debt, etc. Average for a one-bedroom apartment is $900, three bedrooms is $1,450. If we put the two together, we get an average cost of $21,600 for a single person or $57,000 per family. Nationalized healthcare, which isn’t as comprehensive as many think it is, helps mitigate emergency expenses somewhat, but we’re still looking at a single person barely scraping by if they have no emergencies and no debts is barely scraping by. A family of four can’t live on two minimum wage incomes – even if we ignore rent, they’ve only got about $10,000 yearly left over, which won’t even get them that one-bedroom apartment.
As for debt, average student loan debt in Canada, according to the National Post is now over $25,000. Average consumer debt according to CBC, i.e. credit cards, car loans, installment loans, etc, is over $21,000. And the average monthly mortgage payment ranges from $1,500 to $3,000, so even already owning a house isn’t sufficient.
Now, those numbers are averages; there are certainly ways to reduce the cost of living, and there’s a reason that many millennials find themselves back living with their parents. A minimum wage increase can’t be anything but good. Too many Ontarians are struggling as is, especially those who aren’t working the maximum full-time hours, or are working part-time, for any number of reasons.
$15 is a start. But if the numbers are to be believed, it’s not going to be nearly enough.
[Featured Image by PamWalker68/iStock]