Working poor get 'appalling' 25 cents raise

Minimum hourly pay to rise to $8, weeks after MPPs gave themselves hefty raises

Toronto Star, Robert Benzie, Phinjo Gombu, Staff reporters, January 04, 2007

Ontario MPPs just gave themselves 25-per-cent raises, but the lowest paid workers in the province will have to settle for a 25-cent-an-hour hike to the minimum wage.

New Democrat MPP Cheri DiNovo, who has been pushing to have the minimum wage raised by more than $2 to $10 an hour, called plans to raise it instead by 25 cents "just unconscionable."

Labour Minister Steve Peters made it official yesterday the province's minimum hourly wage will rise to $8 from $7.75 as of Feb. 1.

That's a 3.2 per cent increase.

The move comes after MPPs were rewarded with hefty annual pay hikes worth between $22,000 and $39,000 on Dec. 21.

DiNovo also opposed the MPP raise.

"Symbolically it's appalling and in actuality it's appalling," said DiNovo. "We have people out there at $7.75 an hour now even when they're raised to $8 an hour they're still well below the poverty line, working 40 hours a week."

"Over two-thirds of those are women, many of them with children ... and a lot of them are immigrants," she said in an interview.

"We have 13,500 children using food banks in Toronto," said the United Church minister and MPP for Parkdale-High Park.

"If it were only for symbolism, we should not have raised MPPs' salaries," she said.

Premier Dalton McGuinty and Progressive Conservative Leader John Tory have warned that a dramatic $2.25-an-hour increase to the minimum wage would hurt business and jeopardize jobs.

Ontario businesses are already under a lot of pressure, according to Satinder Chera, director of provincial affairs for the Canadian Federation of Independent Business.

Combined with the high dollar, increasing energy prices, and new regulations for fees and licensing, the increase in minimum wage may cost jobs and the ability for small and medium sized businesses that make up the backbone of the economy to grow in Ontario.

"No one disputes the fact about minimum wage but by increasing the number, you are going to increase salary expectations of everyone else and so you have a structural increase in wage that's going to further put pressure on the business," said Chera.

"If you are going to tie business owners' hands, it's going to make it even harder to employ people."

Since the Liberals came to power in 2003, they have increased the minimum wage by 30 cents each year, saying it would help businesses cope and remain competitive.

Ontario's economy is already lagging behind some of the other provinces like British Columbia and Alberta.

In fact, high property taxes in Toronto have claimed 100,000 jobs in the past 15 years, according to CFIB. And increasing the minimum wage will affect future employment.

"It's great to post $8-an-hour minimum wage on the wall but it means nothing to a person who can't find a job," said Chera.

Ashley Nickles, 18, is one of the slew of Ontario residents struggling to make ends meet on minimum-wage or near-minimum-wage.

Nickles, who moved to Toronto from London, Ont., about seven months ago, earns $8 an hour dispensing ice cream to customers at a downtown parlour. She works about 44 hours a week and after taxes takes home roughly $300.

"It's just enough to get me by," said Nickles, who shares the rent on a Scarborough apartment with her boyfriend. After paying for the essentials, including the rent, food, transportation and hydro, she has about $250 left over for the month.

She has to hold back on luxuries, but she notes, optimistically, "I can survive because I am young."

The 25-cent hike in the minimum wage, "is not high," she says.

But like other minimum-wage workers interviewed by the Toronto Star yesterday, Nickles sees her situation as temporary.

She dreams of becoming a dental hygienist and says she wants to go in "that direction, not this direction" pointing at the ice cream containers.

The latest workforce survey by Statistics Canada shows that Nickles' age is typical of minimum-wage earners.

More than half of all minimum-wage workers in Canada are aged between 15 and 25, and women made up almost two-thirds of them, the survey found.

And minimum-wage earners are typically 4.6 per cent of the workforce. In Ontario, the number rises slightly to 5.3 per cent.

As expected, most minimum-wage workers are concentrated in the accommodation and food services industry.

Meanwhile "highly unionized industries such as construction, public administration and manufacturing" had the lowest rate of minimum-wage workers, the survey showed.

DiNovo's private member's legislation calling for a $10-an- hour minimum wage has passed second reading but is now languishing before the Legislature's estimates committee.

"They're putting this bill on the shelf basically, so we're going to have to fight to get it back," the rookie MPP said.

"All those spurious arguments that this is somehow going to destroy the economy are absolutely ridiculous," said DiNovo, noting European countries with high minimum-wage rates are doing well economically.

In a statement, Peters noted that the Liberals are raising the minimum wage for the fourth time since taking office in 2003.

"We are providing Ontario's lowest-paid and most vulnerable workers with the fourth increase in the minimum wage in four years," the minister said.

"It is to Ontario's economic advantage to see that our workers are paid a fair wage," he said, adding the change fulfils a promise that McGuinty made during the 2003 election.

Peters pointed out that the previous Progressive Conservative government froze the minimum wage at $6.85 an hour until the Liberals took power.

The Liberals raised it to $7.15 in 2004, $7.45 in 2005, and $7.75 last year.

By contrast, MPPs, whose wages were essentially frozen for the past decade, received healthy pay increases as a pre-Christmas bonanza.

Their base salaries soared to $110,775 from $88,771. Cabinet ministers' wages rose to $157,633 from $126,321 and the premier's pay went to $198,620 from $159,166.

Adam Spence, executive director of the Ontario Association of Food Banks, said 16.9 per cent of the people forced to use food banks are low-income earners.

"And if you were to exclude children from the mix, it's more like one in three of the people who are served by the food banks are (low-income workers)," said Spence.

"It is a real struggle for a lot of people. Without adequate and appropriate wages, people aren't going to be able to put the basics on their table," he said.

Brenda Campbell, administrator of the Workers' Action Centre, said $8 an hour is inadequate as a living wage.

"People want to work. We want people to work. They should at least be able to live," said Campbell.

"It just does not make sense."

Paulino De Santos, a 35-year-old refugee from Angola, has worked for the past four years as a security guard. He now earns slightly more than the minimum, taking home between $9 and $10 per hour.

But he said he's not unhappy.

"I'll take it because I have to live with it," said De Santos, who hopes one day to be a police officer.

"If it was more, it would be better," said De Santos.

"But it's way better here than in Angola," he said.

with files from Surya Bhattacharya