Roy Doucette, Director Labour Relations Province of PEI

PEI increases the minimum wage to $8.40 and hour, workers say its not enough, business groups complain but what is the real story?

The sub-headline for this story could have been the headline but we have heard it all before. People making the minimum wage don’t think it is enough to get by on. We would agree with them.

But in reality how low is the minimum wage?

PEI’s rate is the 2nd lowest in Canada. Some people would like it to be $10 an hour.

Business owners and the Canadian Federation of Independent Business CFIB cry loudly that they will go out of business if it ever got to $10 they would be out of business. That is of course not true.

I wonder if that gal from the CFIB who likes low wages gets paid double or triple the minimum wage?

PEI’s business owners generally live at about 5 to 100 times the income level of people working at minimum wage. That’s capitalism where the rich capitalize off the cheap labour of the poor.

Business owners like Danny Murphy of Tim Horton’s sport a lavish lifestyle based on the low labour costs of Islanders. Murphy is a capitalist.

Similar capitalists in Ontario and Alberta are paying $15 to $20 per hour for the same staff. They must be profitable so it appears the Province of PEI is subsidizing Tim Horton’s profits with low wage laws.

With all due respect, the comment from Roy Doucette of the Department of Labour seems ironic when most civil servants start their jobs at double the minimum wage.

Doucette himself would be earning four times the minimum wage if not more. A little more sympathy from the public sector would be more becoming of those living on the taxpayers dollar.

Can you live on minimum wage?

Statistics Canada has a measure of poverty called LICO-AT – Low Income Cost of Living After Tax. LICO-AT is the minimum amount of after-tax income you need to get by. You don’t get rich, you don’t save, you live in cheap, maybe bug-infested quarters but you get by. We used to call it living below the poverty line.

In a city the size of Charlottetown the LICO-AT for a single parent family with 2 children is $24,600 and for a single person $16,200. Those are 2005 numbers with inflation added.

A single-parent working 40 hours per week with 2 children will net about $14,271 and have $23,800 with the GST, CCTB, and UCCB benefits. That means a single parent lives at 97% of the LICO-AT which is close.

That assumes no major illness, loss of job or layoff, you shop for bargains at the second hard store and visit the food bank.

For a single person, they net only $14,236 or about 88% of their LICO-AT.

As Jane Ledwell from the Status of Women points out, living on minimum wage does not allow for emergencies and the real things that happen in life beyond basic food, shelter and transportation.

For young, able people this is not the end of the world. They can upgrade their education and try to get a better job. They can leave PEI and earn more income in a bigger centre.

Working parents may find getting more education difficult but not impossible. Hard work and ingenuity have taken many from the poverty level to decent jobs in 3-5 years. Nothing worth having comes easy.

Middle aged women

Many people living at this level are in a kind of perpetual Hell. They may have re-entered the workforce at a later age due to child raising or marriage.  In many cases women 55 and older have disabilities and very limited growth potential in terms of their employment earnings.

DAWN Ontario has advocated on this topic and has raised many good points.

The Federal government is studying this problem and may provide a solution.