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Surviving on Minimum Wage Lived Experiences of Manitoba Workers & Policy Implications by Jesse Hajer and Ellen Smirl

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Surviving on Minimum Wage Lived Experiences of Manitoba Workers & Policy Implications by Jesse Hajer and Ellen Smirl CANADIANCCPA CENTRE FOR POLICY ALTERNATIVES MANITOBA Surviving on Minimum Wage Lived Experiences of Manitoba Workers & Policy Implications By Jesse Hajer and Ellen Smirl AUGUST 2020 Surviving on Minimum Wage: Lived Experiences About the Authors of Manitoba Workers & Policy Implications Jesse Hajer is a faculty member in the Department isbn 978-1-77125-512-7 of Economics and Labour Studies program at the University of Manitoba, and a research associate AUGUsT 2020 with the Canadian Centre for Policy Alternatives - Manitoba. This report is available free of charge from the CCPA Ellen Smirl was a researcher and project manager website at www.policyalternatives.ca. Printed at the Canadian Centre for Policy Alternatives copies may be ordered through the Manitoba Office Manitoba Office. Recent projects include; analysis for a $10 fee. of housing models for those facing homelessness; the barriers marginalized community members face in accessing ID; and the impacts that outsourcing Help us continue to offer our publications free online. municipal services has on marginalized workers. Her We make most of our publications available free work has been published by the Canadian Centre for on our website. Making a donation or taking out a Policy Alternatives, Canadian Dimension Magazine, as membership will help us continue to provide people well as CBC. with access to our ideas and research free of charge. You can make a donation or become a supporter Acknowledgements on-line at www.policyalternatives.ca. Or you can Thank you to all the workers who participated in contact the Manitoba office at 204-927-3200 for this project and shared their stories of working for more information. Suggested donation for this minimum wage. Thank you to the community-based publication: $10 or what you can afford. organizations who helped us share this project. Thank you to Anastasia Chipelski for copy-editing the report. Thank you to Evelina Frolenkova and Roger Ward for valuable research assistance on this project. This research was peer-reviewed. We wish to acknowledge funding from the Social Science and Humanities Research Council of Unit 301-583 Ellice Ave., Winnipeg, MB R3B 1Z7 Canada through the Manitoba Research Alliance tel 204-927-3200 “Partnering for Change: Solutions to Inner-City email [email protected] and Aboriginal Poverty’ project. Thank you to the Manitoba Federation of Labour for supporting this project as well. Note This report was revised after initial publication to correct an inconsistency in the presentation of the information for the single individual in Table 5 on page 9. The Rent Assist amount was originally calcualted for the single individual as the net amount after the dollar-for-dollar claw back in the Education Property Tax Credit; in other instances the Rent Assist amounts are gross amounts, before the claw back. This change results in the “Government Transfers” amount increasing by $551, and disposable earnings falling by $551, and the gap between disposable earnings and the Living Wage and MBM thresholds increasing by $551. There is no impact on the reported values for “Total income (2019)” and “Amount above (below) the low income threshold, Based on total income (2019)”. Text in the report referring to the Rent Assist amount was also updated to clarify this result on page 10. Introduction In 2001, CCPA-Manitoba published a report ti- Crystal* is a single mother of two and works full time. She tled The Minimum Wage and a Tipping Wage: A works as a server and makes minimum wage plus tips but still Survey of People Who Work At or Near the Mini- cannot afford a place for her and her kids so she stays with mum Wage in Manitoba. Researchers gathered relatives. The cramped conditions put a strain on the familial data from 70 workers making minimum wage. relationship. She has asked her boss for a raise and despite her The report concluded that minimum wage was customers telling the boss she deserves one, she has not re- insufficient to provide workers with anything ceived one over the last four years of working at the same job. more than a ‘subsistence wage’ and did not re- flect the cost of living. *All the names used in this report are aliases. This current research represents an update of the 2001 study and concludes that little has changed for minimum wage workers in Mani- posable earnings to escape poverty according to toba. This project utilizes both quantitative Canada’s official poverty line when working full- and qualitative data to explore the challenges time at the minimum wage. Once government of working for, and living on, minimum wage. transfers and subsidy programs are considered, Forty-two workers in Winnipeg and Brandon the minimum wage is still insufficient to bring were interviewed to gain a better understand- a one-person household out of poverty, and sin- ing of their experiences, challenges, and hopes gle parents working full-time can only make it for the future.1 over the poverty line by accessing the province’s This research concludes that an updated cal- Rent Assist program, in addition to the Canada culation of the minimum wage, compared to the Child Benefit. As highlighted by the Internation- cost of living, shows that the current minimum al Labour Organization (ILO, 2016), one of the wage of $11.65 is insufficient to meet the basic purposes of minimum wage laws is to ensure a needs of many minimum wage workers in Mani- living wage. For many workers in Manitoba, the toba and does not provide a living wage. Accord- current minimum wage does not meet this goal. ing to these calculations, all of the representative Minimum wage opponents have argued against family types we examine have insufficient dis- the need for a living wage based on the assump- Surviving on MiniMuM Wage: Lived experienceS of Manitoba WorkerS & poLicy iMpLicationS 1 tion that minimum wage workers are a small and gest that a higher minimum wage can increase job transitory group, primarily teenagers and young quality for low-wage workers as well as economic adults or new workers, who quickly receive wage efficiency. Beyond raising the income of the lowest increases with job tenure and experience. De- paid workers — which would improve their qual- spite these stereotypes, almost half of all mini- ity of life — increasing the minimum wage could mum wage workers in Manitoba are over the age have positive secondary effects including great- of 25, 30 per cent have post-secondary degrees, er employee retention, increased investments in and 32 per cent are married or living common worker training, and reduced need for govern- law.2 Also, the majority (53 per cent) of minimum ment expenditures on income support programs. wage workers have been with the same employer The qualitative contribution to the study re- for over a year, and 43 per cent worked full-time veals how many workers we spoke with are mak- in 2018 (Statistics Canada, 2019). Many of those ing impossible choices, often between the most earning minimum wage are self-reliant work- basic of necessities such as rent and food. These ing adults, many of whom are trying to support voices resist the rhetoric that low-wage workers families, and are struggling to make ends meet. don’t work hard or contribute to their workplac- We recommend that Manitoba raise the es, communities, and families. Workers spoke of minimum wage. Other provinces and munici- getting up at 5 a.m., packing a lunch, commuting palities are instituting fair wage policies, with on the bus, and striving to keep a roof over their some committing to a $15 minimum wage. As of heads and food on the table. Yet many struggle to April 1st, 2020, Manitoba is tied for the second achieve these most basic of goals because their lowest minimum wage in Canada at $11.65 per jobs simply don’t pay them enough. hour. Although slightly higher than Saskatche- In addition to struggling with low wages, wan ($11.32, the lowest in Canada), Manitoba is many workers spoke of the precarious work- significantly below other regional counterparts, ing conditions that they endure. These include: including Ontario ($14), Alberta ($15), and Brit- income volatility and a lack of predictability in ish Columbia ($14.60 as of June 2020), despite scheduling; working part-time involuntarily; being one of the highest under the previous NDP and the lack of non-wage benefits such as paid government. Manitoba, from a comparative per- sick days, pension, and health benefits for low- spective, has room to increase its minimum wage. wage workers. While precarious work is on the We also review theoretical and empirical lit- rise for all workers (Hennessy and Tranjan 2018), erature on impact of moderate increase in the for low-wage workers the effects are particularly minimum wage, with developments increasingly challenging because many simply do not have the favouring minimum wage increases. Critics of financial security to endure income volatility. raising the minimum wage argue that moder- Although the focus of this research was aimed ately increasing minimum wage will reduce em- primarily at responding to wages, in speaking to ployment. However, a thorough review of existing workers it became clear that non-wage working empirical evidence demonstrates that this effect conditions such as the lack of sick pay and er- is small — if it exists at all — and minimum wage ratic scheduling negatively affected their lives. workers on average benefit from increases in the We suggest that the province make changes to minimum wage (see summary below). Theoreti- the Employment Standards that will require em- cal developments also suggest that moderate in- ployers to provide workers with paid sick days creases in the minimum wage will benefit low-wage and one-week advance scheduling notice as en- workers without negatively impacting jobs or the acted in other provinces across Canada.
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