Nova Scotia’s Standing Committee on Public Accounts announced Wednesday that the impact of low wages doesn’t just hurt those who are already struggling to make ends meet.
Christine Saulnier, director of Nova Scotia’s chapter of Center for Policy Alternatives of Canadatold the committee that “the negative impact of a low-wage economy is profound.”
“When we have so many people facing barriers to reaching their full potential and not being paid what they deserve, their lower productivity will hurt their own revenue,” she said. government, reducing income and consumption taxes.
“Additionally, we know that earning a low wage has a negative impact on workers’ health and leaves them struggling to cover their basic needs. We all have to pay for the additional public health costs and social benefits needed to fill the gaps.”
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She said that wages considered low should be compared with a living wage – what someone needs to earn to support a family and have a good quality of life – that is estimated around $22 per hour in Halifax.
Saulnier said those earning $22 per hour or less represent about 50% of workers in Nova Scotia.
She added that the province’s low-wage economy is also marked by lower quality of jobs.
“The lower the salary, the more likely a job is unsafe and doesn’t come with benefits,” says Saulnier, noting that only 31% of Nova Scotians earn $25,000 per year or less paid sick leave.
“The low-paying economy reflects the value of certain types of jobs, skills and workers, and we need to understand why. It also exacerbates inequality by race, gender, disability,” she said.
“If COVID-19 has taught us anything, it’s that the people we pay the least for are the people we need most.”
According to a report from the Canadian Center for Policy Alternatives prepared before Saulnier’s presentation to the committee, the impact of poverty in Nova Scotia costs just over $2 billion a year.
This figure includes $230 million in lost revenue, $279 million in additional costs for health and welfare services, and $1.4 billion in opportunity costs, resulting in lost capacity. rate and is omitted revenue in the form of income tax.
“The largest component of the costs of poverty is that poverty is incurred to limit a person’s productivity, and therefore their earned income (excluding tax losses),” the report said.
“Consider that this $1.4 billion loss would be a gain if we tackled several of the root causes, including low wages, but also unemployment, underemployment, discrimination, health inequalities and barriers to education and training.”
Saulnier told the commission that the province could no longer “compete on the race to the bottom”.
Addressing low wages, including by dramatically increasing the minimum wage, reduces the need to use the tax system for redistribution and helps stimulate overall purchasing power and aggregate demand, she said.
Danny Cavanagh, president of the Nova Scotia Labor Federation and member of the committee that reviews the province’s minimum wage, also spoke to the standing accounts committee Wednesday.
The committee has previously recommended The province gradually increases the minimum wage to $15 by April 2024. The current minimum wage is $13.35.
Cavanagh said he could not speak on behalf of the committee, which includes representatives from both labor and business perspectives, but said he believes wages should be higher.
“As part of the committee, I certainly believe and would love to see us hit the $15 an hour minimum wage, a lot faster than we currently are, but we are on the way. way to get there,” he said.
“And to be honest, $15, I think right now isn’t enough for a lot of people to live on.”
Cavanagh notes that at $13.35, someone’s gross pay for a 40-hour workweek — “if you’re lucky enough to have a 40-hour-a-week job” — would be $534.
For $15 an hour, it goes up to $600 a week.
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“Simply, to fill a barrel of oil, right now, today, with furnace oil, costs about $2,200,” he said. “At today’s minimum wage, that’s 4.1 work weeks to refill your oil tank.”
Cavanagh said workers are “fed up” with low wages and casual, part-time jobs with inconsistent schedules, and said this shows the importance of having more “union work.” good” to “bring benefits to help build the economy”.
He said the federation wanted to work with the government to make that a reality.
“We all want a province that, at the end of the day, is a good place to live and work and raise our families,” he said, “and we need to do that by working.” together and by listening to each other. ”
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Tracey Taweel, Undersecretary for Community Services, said the department has a number of programs to help residents and young people earn a living.
“All Nova Scouts want to provide for themselves and their families, contribute to their communities, and lead fulfilling lives,” she said. “Our job at DCS is to help Nova Scotians find success.”
She said DCS uses the market basket measure (MBM) to determine the poverty range of the province, similar to other provinces and territories. MBM calculates the minimum amount that a person or family must earn to afford a list of goods and services needed to achieve a modest or basic standard of living.
According to MBM data from 2019, the poverty rate in Nova Scotia is 12.1%, with the child poverty rate at 10.9%.
While the poverty rate in Nova Scotia falls to 7.7% in 2020, Taweel notes that the data includes income support during the pandemic, so that drop could be an “anomaly”. “. The data from 2019 is more reflective of the current situation, she said.
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But NDP MLA Susan LeBlanc, a member of the standing committee on public accounts, questioned what those numbers say about the state of wages in the province.
She noted that the Canada Emergency Response Benefit, which provides $2,000 a month to people laid off due to COVID-19, works out to about $15 an hour for a 40-hour workweek.
“What does it say about the Nova Scotia economy that this benefit has led to an improvement in household income in the province?” she speaks.
“Does that sound like we’re in a healthy situation, a healthy place, if $2,000 a month is an improvement and it’s actually helping people?”
This income increase shows that governments have the ability to act quickly if they want to, Saulnier said. “I think we need to get some things out of COVID,” she said.
No increase in minimum wage
Nova Scotia Premier Tim Houston recently said there are no plans at work to provide relief to those struggling with the soaring cost of living.
“I don’t agree that we didn’t do anything,” he said at the legislature last week, referring to the $13.2 million package announced in March to help those affected. income support.
That package includes additional funding for food banks and a one-time $150 payment for income-supported people and those eligible for the provincial heating-assistance rebate.
It’s not clear exactly how far that one-time payment will help those already receiving it, given the rapidly increasing costs of housing, food and fuel.
In addition, Houston said he is not considering accelerating a plan to implement a $15 minimum wage, even though that plan was introduced in January, before inflation reached the crisis levels seen in the past few months. recently.
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During Wednesday’s meeting, Ava Czapalay, Deputy Minister of Labour, Skills and Immigration, said the province must use a “balanced approach” when it comes to raising the minimum wage.
“I would say again that the minimum wage affects the lives of many workers, as well as businesses, and it is about striking a balance,” she said.
“If the minimum wage is too high, then businesses may consider part-time work or perhaps make some adjustments that impact more workers.”
Her colleague Cynthia Yazbek, executive director of labor services, says the minimum wage cannot rise to five times the rate of the consumer price index, or “you start to see some negative effects.” to entrepreneurship employment” employs workers in their small businesses, in their workplaces. “
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As of April, consumer prices in Nova Scotia were up 7.1% year over year. LeBlanc points out that five times seven is 35.
“It looks to me like at this point, with the CPI being so high… I think we can work out a $15 gain a lot faster,” she said.
NDP MLA member and committee member Claudia Chender asked whether the province would consider bringing the commission back to the minimum wage review or raise wages in an “urgent” manner beyond the commission’s recommendations, “extraordinary.” acknowledge the impact of low wages on our economy and ask them to review the available information.”
Czapalay said the minimum wage review committee is the mechanism the province uses to set the minimum wage, and there is currently a vacant position that needs to be filled before it can meet again.
“It’s important to take both an employee’s and an employer’s perspective and offer that advice in that balanced way,” she says.
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