Saskatchewan has announced plans to raise its minimum wage to almost $8 per hour by 2007.
The wage will be bumped in three stages. The first stage is a 40 cent increase to $7.05 per hour on Sept. 1, 2005. The next increase will be to $7.55 on March 1, 2006. The final increase will take effect on March 1, 2007 to $7.95.
“Minimum wage earners in Saskatchewan have not had an increase in over two years,” said Labour Minister Deb Higgins. “This three-stage increase helps balance the needs of businesses to be competitive with the needs of minimum-wage earners.”
The province said there are about 7,000 people that earn minimum wage in Saskatchewan, or about two per cent of the paid workforce.
The increase follows a review by the Minimum Wage Board. The board, which is required to review the minimum wage every at least every two years, held public hearings in the fall of 2004. It received 582 written and six oral submissions.
Assuming a 40-hour work week, a minimum wage worker in Saskatchewan would currently earn $13,624 a year. Here’s what the increases will do:
•As of Sept. 1, 2005, that worker would earn $14,664.
•As of March 1, 2006, that worker would earn $15,704.
•As of March 1, 2007, that worker would earn $16,536.
What the board said
Here are the conclusions the board came to in its review:
The Minimum Wage Board’s review of the various social and economic factors involved in establishing the Saskatchewan minimum wage has provided significant evidence that it is necessary to consider an adjustment to the minimum wage to maintain a minimum acceptable standard of living for low-income individuals and families.
•The minimum wage level is a critical factor in the viability of Saskatchewan businesses, because it establishes a benchmark for determining the cost of labour to business. It is important to consider the impacts of higher wage costs on the business community when examining any increase in the minimum wage.
•The spin-off benefits of any increase in the minimum wage must also be taken into consideration, because aggregate levels of economic activity and employment change following adjustments in the wage structure. Increased spending power of employees earning the minimum wage can be expected to generate higher local consumption of goods and services.
•The trade-offs associated with these changes in economic activity and business costs must be balanced with the objective of maintaining a minimum acceptable standard of living for low-income individuals and families, and the reduction of poverty levels in the community.
•Previous adjustments in the provincial minimum wage have led to an increase in the number of employees working below the minimum wage. This suggests that some employees are not aware of changes in minimum wage standards. The Minimum Wage Board therefore believes that public dissemination of information regarding minimum wage legislation and implementation is important to ensure that affected employees benefit from any increase in the minimum wage.
Data presented to the board
Here’s a look at some of the information the board considered in deciding to recommend an increase to Saskatchewan’s minimum wage:
•42,000 Saskatchewan residents live below the poverty line;
•the minimum wage has only increased $2.40 per hour since 1985;
•the minimum wage would be $8.30 per hour if it had been adjusted annually for inflation since 1995;
•the minimum wage has remained stable at about $5 per hour since 1990 in constant dollars;
•the purchasing power of the hourly minimum wage has remained stable since 1990;
•the annual salary of a full-time minimum wage employee is currently $13,832 compared with the low-income cut off level of $16,979; and
•the cost of living has risen by 5.8 per cent since the last increase.