While the increase demonstrates that the government recognizes the inadequacy of the current minimum wage, it still falls short of what is necessary.
We calculate that a family of four would require a living wage of $16.23 per hour for Regina and $16.89 per hour for Saskatoon to maintain a decent standard of living in those cities. So even with the government increase, working families will continue to be unable to meet many of their basic needs until Saskatchewan’s minimum wage approaches relative parity with the living wage.
The need for a higher minimum wage in Saskatchewan is borne out by the numbers. Saskatchewan’s poverty rate of 19% remains higher than that of the rest of the country (16.4%), and the province’s child poverty rate of 26.1% is greater than in all other provinces and territories except for Manitoba and Nunavut.
The story of child poverty is very much a story of low wages. Indeed, child poverty in Saskatchewan, if based on market income alone (wages and salaries), would be closer to 38%. As University of Regina’s Dr. Miguel Sanchez states, “the fact that without social spending the precarious situation of children in Saskatchewan would be much worse is an indication that incomes derived from the labour market are insufficient for many working families.”
The living wage can be a powerful tool to address the state of poverty in our province. It gets families out of severe financial stress by lifting them out of poverty and providing a basic level of economic security.
But it is certainly not a lavish wage; it is based on a conservative, bare-bones budget that does not include many of the expenditures that most of us take for granted, like home ownership or retirement savings.
Living wage numbers also provide us with a powerful reminder of the importance of social spending in the economic lives of working families.
As fate would have it, we last calculated the living wage for Regina in 2016, just as the federal Liberal government came into power. When we compare the 2016 calculation against 2021, we can see how social spending under two different federal governments affected our model living wage family.
In 2016, we calculated the living wage for Regina at $16.95 per hour. And yet, five years later, the living wage for Regina was actually less, at $16.23 per hour. Given that the cost of living invariably rises, how is a lower living wage possible?
It’s important to remember that a living wage is determined by a combination of both employment income and government transfers. In 2016, our Regina living wage family earned $61,860 from employment and received $5,750 in government transfers. In 2021, that same family earned $59,239 from employment and received $13,526 in transfers. While the total family income required to meet basic needs increased between 2016 and 2021, a larger share of that family income came from government transfers and reduced taxes in 2021.
The increase in transfer income is primarily due to the introduction of the Canada Child Benefit (CCB) by the federal Liberal government in the 2016 federal budget. With the CCB, Canadian households can receive up to $6,400 per year for each child under the age of six, and $5,400 per year for each child between the ages of 6 and 17.
The CCB replaced the much less generous $100-per-month child care benefit introduced by the federal Conservatives in 2006. This demonstrates the power of government programs to positively redistribute income and protect against the vagaries of the private labour market.
All things remaining equal, we should see the institution of $10-per-day universal child care have a powerful effect on the living wage as well. As child care is often the second largest expense after shelter for the model living wage family, any reduction in that expense could have the effect of further reducing what a family needs to earn in the private labour market to meet their expenses.
Of course, given the current rise in inflation, these savings may be tempered by the overall rise in the cost of living. But what this illustrates is that social programs have an essential role to play in ensuring that a family’s basic needs are met and in enhancing their quality of life.
