Minimum Wage Increases and Industry Readiness
Three dollars.
What could you do with three dollars more an hour on your pay cheque?
That’s the difference between minimum wage in New Brunswick and the rate that will be introduced in Alberta (in October) and Ontario (on January 1, 2019). It’s the number that’s on everyone’s mind when talking minimum wage these days.
New Brunswick is lagging behind the country in adjusting wages; only Nova Scotia and Saskatchewan, at $10.85 and $10.96 respectively, rank lower than us. We also have one of the highest percentages of residents working for minimum wage. Nationally, about half of minimum wage earners are adults, with nearly 8% of New Brunswick’s population relying in these positions. (For comparison, only 4.5% of people in Saskatchewan work for minimum wage.)
What if that jump of three dollars an hour coincided with a decrease – perhaps even an elimination – of your childcare expenses, and after you completed a post-secondary program debt-free?
Imagine a high school graduate in New Brunswick this year. They work part time for minimum wage while attending a college program, now free to roughly two-thirds of families in the province. Two or three years from now, they switch to full time hours and slowly build up a small savings fund and inch ahead on the pay scale. Five years in the future, they start a family – and continue to slowly save money, as they are able to enroll their child in free daycare regulated by the province. With some financial foresight, the graduating class of 2018 could be much better off than the class of 2008 or 1998 as they enter their prime income earning years.
It sounds rosy painted like this, but of course there is a flip side: many of these entry level, minimum wage positions are at risk. As the cost of hourly rates rises (which it will with inflation, even if the province doesn’t move to meet the national shift), so do the costs to local businesses. Some will struggle with the higher rate and likely flounder. Others will turn to increased automation. A few will innovate in a way that transforms their business, and perhaps others, for the better.
The province has focused recently on programs that aim to remove barriers for individuals and families entering the workforce. Now, it needs to focus on support – perhaps financial, but certainly resources and education – for businesses to adjust to the changing workforce needs. A report released this week by the C.D. Howe Institute suggests New Brunswick is among the least prepared for expected shifts in the marketplace, particularly automation in low skilled positions. It echoes comments made by Atlantic Canada Opportunities Agency head Francis MacGuire to our East Coast premiers last month. Our industries need to adapt, along with our workforce.
The current provincial government has put in place several strategies and programs that should improve our collective skills as a labour market. Now is the time to focus similar energy on industry and entrepreneurs. The provincial department of Post-Secondary Education, Training, and Labour had a strategic plan for 2015-2018; what’s next? I’m hoping for a much more innovative and engaging document looking toward 2022, detailing ways we can take the offense on issues like automation, rather than reacting long after the changes have shifted the base of our economy. Our province is full of innovative thinkers and business leaders on a national and international scale; we need to listen to these people and engage them in helping our province prepare for major shifts, both in terms of a workforce looking for higher wages and industries needing to make profits and progress.
A version of this post appeared originally in the Times & Transcript. Click here for more of Jenna Morton’s column, She Said.