Why the $15 minimum wage movement isn’t louder in Canada

This week, the United Kingdom’s minimum wage for workers 25 and older climbed from ₤6.70 to ₤7.20 putting it around $13.32 in Canadian dollars. The 50-pence increase – which works out to about $0.93 here – is part of the country’s move to get minimum wage to ₤9, or about $16.80, by 2020.

To conceptualize the lift, the Financial Times developed a Big Mac/minimum wage index – a riff off The Economist’s infamous Big Mac index, which uses the fast food staple as a gauge for purchasing power – that looked at how long it’d take an employee working at minimum wage to buy a Big Mac. By the FT’s calculation, the 26 minutes it’d take a minimum wage worker in Britain to afford a Big Mac at ₤6.70 was still a full six minutes faster than Canada at 33 minutes and the U.S. at 41 minutes.

Actually, according to the tweaked Big Mac/minimum wage index, Canada still sits behind Japan at 32 minutes, Germany at 26 minutes, France at 25 minutes, the Netherlands at 24 minutes, Australia at 18 minutes and Denmark at 16 minutes.

While the fight for higher minimum wages in other G20 countries – like Germany, which added its first minimum wage last year – seems to have caught fire, in Canada it’s a little bit quieter.

“I think there is a ‘fight for $15’ here in Ontario – there is a lot of non-profit groups that have bubbled up to fill the gaps that government and unions aren’t filling,” says Rafael Gomez, director of the Centre for Industrial Relations and Human Resources (CIRHR) at the University of Toronto.

But in Canada, where roughly a third of workers have union coverage – a good portion of those in the public sector – the fight for minimum wage is bound to have less voices than somewhere like the U.S. where less than one in ten workers are covered by some sort of union agreement, explains Gomez.

“But I think in contrast to the UK or the U.S., our union movement is still fairly robust,” he says. “That soaks up a lot of the anxiety that is felt.”

In Alberta, NDP premier Rachel Notley campaigned on the $15-an-hour minimum wage, promising to raise the provincial bottom line from $10.20 an hour to $15 in three years. Last October it was hiked to $11.20.

Much like British Columbia ($10.45/hour), Northwest Territories ($12.50/hour), Nova Scotia ($10.60/hour), Saskatchewan ($10.50/hour), Yukon ($10.86/hour) and Ontario ($11.25/hour), Alberta’s minimum wage is tethered to the Consumer Price Index and adjusted annually.

“In Ontario, it’s an automatic system supposedly out of the political realm, tied to cost of living and will be increased to match our inflation rate,” says Gomez.

The key criticism of raising minimum wage is that it’ll cost jobs by making it tougher for businesses – specifically smaller enterprises – to make a profit.

In Denmark, where the average minimum wage across public and private sectors is 110 Danish Krones, roughly $22 (not adjusted for Purchasing Power Parity), higher wages do come at a cost, though not to profitability, explains Gomez.

“Denmark is a highly productive country where what they’ve done is allowed a lot of freedom for employees – unions are present but they don’t really get involved in the workplace,” says the professor, adding that they predominantly focus on negotiating the social safety nets for Danish industries as a whole. “But at the same time, the Danish know they can’t have that level (of pay) and flexibility without some sort of balance… so they just agree to tax themselves enough to pay for those systems and the trade-up is firms have a lot of latitude.”

Although Gomez says he can’t prognosticate on whether or not Canada will reach a $15 an hour minimum wage anytime soon, he doesn’t see the movement getting much louder than it is compared to the U.S. or UK.

“Canada just seemingly has a bit of a buffer in part because a larger share of employment goes to the broader public sector,” he says. “That broader public sector tends to be more heavily unionized and those employment relationships are just steadier and not as fraught with uncertainty.”