The provincial government has announced plans to increase the minimum wage to $15 next year, but some are questioning whether it is still enough.
Despite that increase, it still leaves Simcoe County residents earning $4.05 less than what the Ontario Living Wage Network (OLWN) indicates is needed for local residents to be able to afford their basic expenses and participate in their community.
In Simcoe County, the OLWN says workers would need to earn a minimum of $19.08 per hour to cover expenses such as food, clothing, shelter, child care, medical expenses, recreation, and a modest vacation. That amount does not include saving for retirement, debt repayment, home ownership, education savings or any additional savings except the smallest cushion for emergencies.
“Wages below that number are poverty wages for anyone trying to cover the costs of living here. Many households are finding that once they pay their rent, there is no money leftover for everything else,” said Jennifer van Gennip, from Redwood Park Communities.
As most people earning minimum wage are 25 years of age or older, van Gennip noted one of the most effective ways to lift working people out of poverty is to simply pay them more.
“We know that money put in the wallets of our lowest wage earners returns back into our local economy quickly. So, the increase in minimum wage is a welcome one, but it is not enough,” she said. “It's about $4 per hour short. The living wage should be the minimum.”
The Ontario government made the announcement Tuesday, noting it will introduce legislation that, if passed, would raise the general minimum wage from $14.35 to $15 hourly effective Jan. 1, 2022.
From January to August 2021, there were 763,500 workers at or below the proposed general minimum wage of $15 in Ontario. If approved, the increase means a full-time worker making the general minimum wage could see an annual earnings increase of $1,350 in 2022 under the proposed legislation.
Under the proposed changes, the special minimum wage rate for liquor servers would be eliminated and they would be entitled to the general minimum wage. Students under 18, home-workers and hunting, fishing and wilderness guides would also see an increase in their special minimum wage rates.
OLWN program manager Anne Coleman said the living-wage calculations were previously based on a family of four. But that has now changed because new public policies that provide support to families with children have been introduced by both the provincial and federal governments — and family demographics continue to change — so it quickly became clear that expenses for a reference family of four is no longer the best reference for living wage calculations in Ontario, she said.
"Our 2021 living-wage calculations look at expenses for a family of four with two working adults, a single parent with one child and a single adult," Coleman said. "We use a weighted average to determine the living wage rate for each community. This means that we’re not really able to compare 2021 living wage rates to those previously calculated in a community.
"However, we can see that the biggest expenses for these three households are rent, food, and in the case of families with children – child care."
All three of these expenses went up significantly in Simcoe County since the previous living-wage calculation was done in 2018, she noted, adding the cost of rent specifically has lead to a greater living wage rate in Simcoe County than in Muskoka.
"The living wage is the hourly wage a worker needs to earn in order to cover their basic expenses and have a little extra to participate in community. The living wage sets a higher test then the provincially mandated minimum wage... (and) is calculated based on the real costs in a community," Coleman said. "The living wage gets families out of severe financial stress by lifting them out of poverty and providing a basic level of economic security."
Coleman said it is "a call" to private- and public-sector employers to pay wages for both direct and externally contracted employees sufficient to provide the basics and participate in community life.
Finance Minister Peter Bethlenfalvy said the province owes an "incredible debt of gratitude" to the workers of Ontario.
"These dedicated men and women kept store shelves stocked and supply chains going through the pandemic,” he said in a news release. “However, we also recognize that for too long workers have been falling behind and that wages for many have not kept up with the cost of living. They had Ontario’s back, and now, our government has theirs.
"Ontario workers should be in a race to the top, not a race to the bottom," the minister said.
