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More work for minimum wage, not keeping pace

The good news: the Canada-wide minimum wage increased in a four-decades study. The bad news: it increased by one cent.

Statistics Canada this week reported that in 2013, the average minimum wage in Canada amounted to $10.14 per hour. The 1975 minimum wage translated into 2013 dollars  was an almost identical $10.13.

On second thought, that’s not good news.

Worse still, that stagnant minimum wage gained ground on the average wage. In 2013, the average hourly earnings of employees amounted to $22.27, meaning the minimum wage corresponded to 46 per cent of the average hourly earnings. The ratio of the average minimum wage to average hourly earnings increased from 41 per cent in 2005 to 46 per cent in 2013 because the average minimum wage rose faster than the average hourly earnings.

While still deemed an inadequate living rate, the minimum wage (which rose to $11 in Ontario last month) has actually been steadier of late after periods of fluctuation, adjusting for inflation.

Between 1975 and 1986, for example, the real minimum wage declined from $10.13 to $7.53, before increasing to $8.81 in 1996. Up to 2003, the real minimum wage remained stable at around $8.50. Since 2003, the real minimum wage increased by almost two dollars, from $8.27 in 2003 to $10.14 in 2013.

Also of concern is the fact that a larger percentage of the labour force is earning minimum wage, reaching 6.7 per cent last year from five per cent in 1997.

Not surprisingly, young workers are most likely to be earning the minimum. In 2013, 50 per cent of employees 15 to 19 years old were paid at minimum wage. Among those aged 20 to 24, the rate was 13 per cent. As well, the jobs often associated with young people and those with less education were those likely to pay just the minimum. Overall, the proportion of paid employees at the minimum-wage rate was 17 per cent in retail trade industries and 27 per cent in accommodation and food services industries. Together, these two industries accounted for more than 60 per cent of all employees earning the minimum wage in 2013, Statistics Canada reports.

This jibes with studies in Canada and the U.S. showing parents today are increasingly convinced their children will be less well off than they were. The figures back up that sentiment, as the great prosperity that flowed out of the postwar years in particular succumbs to constant attack.

The majority of us have seen our real incomes decline. Studies show the gap between rich and poor is growing, even during the best of economic conditions. The trend that started in earnest 30 years ago has been exacerbated by the recession from which we’re still theoretically emerging.

We’re spending more time at work, but 80 per cent of us are getting a smaller share of Canada’s economy, in good times and in bad. Only the richest 20 per cent are experiencing gains, and most of those gains are concentrated in the top 10 per cent.

You can expect that trend to continue in earnest, aided by the slow recovery from the recession – what some say is a systemic shift to lower incomes and a decreased standard of living.

We may well emerge from the effects of the great recession, but the real goal will be to reverse the downward pressure on the middle-class society that emerged in the postwar era.

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