Social Policy in Ontario

Minimum wage in 2013 just a penny more than 1975, after inflation: Statistics Canada

Posted on July 17, 2014 in History

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TheStar.com – Business – A Statistics Canada report says the average minimum wage was $10.14 in 2013 and the 1975 wage, expressed in 2013 dollars, was $10.13.
Jul 16 2014.   By: Madhavi Acharya-Tom Yew, Business Reporter

In 1975, Betamax was the hot technology, Captain & Tennille sang Love Will Keep us Together and it cost about $58,000 to buy a house in Toronto.

In 2013, Google Glass made its debut, Thrift Shop by Macklemore & Ryan Lewis ruled the charts and the average price of a home was just over $523,000.

Over that time, the minimum wage, after inflation, barely moved, according to a report released Wednesday by Statistics Canada.

The agency said the weighted average for the minimum wage among the provinces was $10.14 in 2013.

Expressed in 2013 dollars — or constant dollars, to account for inflation, as economists say — it was $10.13, just a penny less, in 1975. (The actual minimum wage was $2.40 in Ontario that year.)

The rate did change over the years between, falling to the equivalent of $7.53 per hour from 1975 to 1986 and rising to $8.81 in 1996. The real minimum wage remained stable at around $8.50 until 2003, and then began climbing.

The StatsCan report is sure to add fuel to the simmering debate over the minimum wage, income inequality and the reasons for Canada’s high youth unemployment rate.

“It makes absolute sense (the minimum wage) is around the same levels after inflation,” Nicole Troster, senior policy analyst for Ontario for the Canadian Federation of Independent Business said, referring to the 40-year time span.

The majority of minimum wage earners are between the ages of 15 and 24 and are in their jobs for about a year, she added.

The federation argues that increases in the minimum wage hurt businesses and the economy, and that to reduce poverty, the government should focus on skills training.

“We have had positive economic growth over the past four decades over and above the inflation rate. That’s why I say that all workers should share in the growth that they produce, including those who are earning minimum wage,” said Erin Weir, economist for the United Steelworkers union.

“While corporate lobbyists have complained bitterly about recent increases in the minimum wage, these improvements have simply restored the minimum wage to mid-1970s levels after it lagged behind inflation in the 1980s and 1990s.”
Of the 13 U.S. states that recently raised their minimum wage rate, 10 have experienced above-average job growth, said Armine Yalnizyan, senior economist at the Canadian Centre for Policy Alternatives.

“It’s not the solution to poverty but it improves the purchasing power of young people, which means they have less debt and more opportunities and more choices about what to do with their money.”

As for companies that say they can’t afford to pay their workers more when the minimum wage goes up, “if the business model is so fragile that raising the minimum wage is going to drive you out of business, something else is likely to do that to you, too,” Yalnizyan added.

The StatsCan report said that 6.7 per cent of all paid employees earned the minimum wage in 2013, up from 5.0 per cent in 1997. The increase is proportion is partly a result of the minimum wage going up in many provinces, the report noted.

Statistics Canada found that the majority of workers earning minimum wage work in the retail and accommodation and food services industries, the report said.

Young employees, less-educated employees, part-timers and people in service industries were most likely to be paid minimum wage.

< http://www.thestar.com/business/2014/07/16/minimum_wage_in_2013_same_as_1975_in_constant_dollars_statistics_canada.html >

Tags: economy, ideology, jurisdiction, standard of living, youth

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