Prince Edward Island’s minimum wage will rise to $15 an hour on Sunday, but social advocates say the increase is not enough for people in poverty.
Starting October 1, the minimum wage will increase 50 cents an hour from $14.50.
This is the second of two planned increases for the year after the Employment Standards Board’s annual review recommended the government move more quickly toward its $15 minimum wage target due to the pain of high inflation. At the beginning of 2023, salaries rose from $13.70 to $14.50.
That’s nominally an increase of $1.30. In real terms, the 3.5 percent inflation rate over the past year means that a person who earned $13.70 an hour last August would earn the equivalent of just 78 cents more in August 2023.
Inflation is measured by the Consumer Price Index, which tracks the overall change in consumer prices over time by controlling for what a basket of common goods and services would cost.
Given how much things are costing, Mary Boyd, coordinator of the MacKillop Center for Social Justice, says the couple of increases in the minimum wage are not enough.
In 2020, a report from the Canadian Center for Policy Alternatives found that the living wage for someone in Charlottetown was $19.30 an hour. The minimum wage at that time was $13.
“You can imagine how much more everything has increased for all the families and all the workers,” Boyd said of the three years that have passed since then.
Of the new $15 minimum wage, he said: “Right now it seems very, very inadequate, and it’s going to be very difficult for people as it is. It’s not going to achieve the improvements that people were hoping for.”
In a report released by Food Banks Canada earlier this week, P.E.I.’s attempts to fight poverty earned a C grade, although it remains one of the best grades in the country.
Piloting a guaranteed income project
PEI’s Department of Social Development and Seniors told Breaking: in a statement that it continues to discuss a guaranteed basic income project, in partnership with the federal government.
The province is now piloting a targeted basic income program that has 635 clients.
Boyd said the province needs to strengthen its security needs to help Islanders in need.
“Guaranteed income has been promoted a lot and it’s clear that people need more income. But that’s not the only story,” he said.
“They need better public housing, they need better transportation, they need disruptions to education, they need a public health care system they can rely on… [Getting] “A check from Ottawa with the kind of inflation and costs that are affordable right now would disappear pretty quickly.”
Impact on business?
Meanwhile, businesses say the 50-cent increase in the minimum wage rolling out this weekend could have a big impact on their bottom lines.
Kim Horrelt, interim executive director of the Charlottetown Chamber of Commerce, said small businesses are already struggling to keep up with high interest rates, inflation and the aftermath of post-tropical storm Fiona and the COVID-19 pandemic. .
“There are some who say… they will have to reduce their hours [of operation]. Others say this will increase the cost and prices of products,” Horrelt said.
“About 67 percent of our members already pay above the minimum wage, but that will also affect them, you know, because they will have to increase those wages for the sake of equity and compensation, etc.”
Horrelt said small businesses will have to raise wages to remain competitive in the labor market.
He said the chamber supports a fair wage, but would like to see all levels of government enact measures to help businesses as well.
“If you looked at the basic personal tax or the brackets, there would be more take-home pay for those who are at that lowest level, the minimum wage level,” he said.
“Without government help, I think our inflation problem will get worse. Salaries will go up, but so will inflation.”