Yet some Canadian workers still struggle financially while working part-time, temporary and low- or minimum-wage jobs. In 1913, five additional wage boards were set up that covered hollow ware making, shirt making, sugar confectionery and food preserving, tin box making, and linen and cotton embroidery, along with a portion of the laundry industry. He also notes that the studies finding no impact tend to use a particular methodology (in other words close controls) and there is an active debate about its advantages and disadvantages, with Neumark himself critical of the approach. The minimum value is 35.6 occurring in 1986. For example, they estimate that a 1% increase in the minimum wage leads to a 0.41% increase in the wages of those earning between 1.1 and 1.2 times the previous minimum wage, while those earning between 1.2 and 1.3 times the minimum can expect a 0.36% increase. Under the Code, employees in the FRPS who believe they are not being paid the appropriate minimum wage are entitled to file a complaint with the Labour Program. Diane Galarneau and Eric Fecteau, The Ups and Downs of Minimum Wage, Statistics Canada, Cat. Minimum wages as an anti-poverty policy in Ontario. Neumark, D. (2017). [1] The wages board did not set a universal minimum wage; rather it set basic wages for six industries that were considered to pay low wages. Minimum wage effects on labour market outcomes under search, matching, and endogenous contact rates. This is the base rate for adult employees in the national system who are award/agreement free. On 29 December 2021, the federal minimum wage was changed to $15 per hour for workers employed in the federally regulated private sector. Journal of Public Economics, 96, 739 to 749. Monthly Labour Review, 124(5), 17 to 27. Rather than rely on Congress to agree on raising the minimum wage again in 10 years or so, a bill introduced by Sanders would require it to be raised each year by the Department of Labor based on . According to a 2019 Labour Statistics research paper, the majority of minimum wage workers are women. In Canada, provinces and territories regulate minimum wage (see Provincial Government in Canada; The minimum value is 4.0 and it corresponds to "25 to 34." Working paper 2014-06. Does the minimum wage vary depending on the region in Australia? The federal minimum wage, introduced in 1938 during the Great Depression under President Franklin Delano Roosevelt, was initially set at $0.25 per hour. For example, Fortin and Lemieux (2016) found that increases in the minimum wage were a major explanatory factor in the modest decrease in wage inequality after the mid-2000s, where wages at the lower end of the income distribution grew more than those in the middle. This includes employees in federally regulated industries, federal Crown corporations and certain Indigenous government activities on First Nations reserves. Some authors have suggested a link between minimum wage increases and worker training; however, the empirical record is mixed at best with the only Canadian study to examine the issue (Baker, 2005) concluding that data quality was too poor to be definitive. Ontario raised its minimum wage from $11.60 to $14.00 per hour on January 1, 2018. (2002). . (September 2022) Carrington, W.J., and Fallick, B.C. (PDF version 464.44 KB) Industrial and Labour Relations Review 64(4), 712 to 746. Did you know? Are there circumstances in which the federal government should consider using its existing regulatory authority to set a minimum wage for employees in the FRPS that differs from the minimum wage in the province or territory in which they usually work? Fortin, P. 2010. Description for Chart 1 Minimum wage is often expressed on the basis of average hourly earnings. The responsibility of the commission includes the setting of the standard federal minimum wage,[4] replacing the role of the Australian Industrial Relations Commission that took submissions from a variety of sources to determine appropriate minimum wages. VOX CEPR Policy Portal. They estimate that it raised wages for farm labourers by 15 per cent by 1929, and by more than 20 per cent in the 1930s. Workers in the construction industry (industrial, commercial, institutional, or heavy construction sectors): rates based on occupational classification, This page was last edited on 15 June 2023, at 07:52. Minimum wage in Canada - Wikipedia The purpose of minimum-wage laws is to prevent employers from exploiting workers. Between 1997 and 2014, the proportion of employees receiving minimum wage rose from 5.0% to 7.2%. Under this regulation, employees At the roundtables hosted by the Minister of Employment, Workforce Development and Labour, unions and labour groups indicated their support for a federal minimum wage of $15 per hour, indexed to inflation. Arthurs, H.W. Contemporary Economic Policy, 36(1), 116 to 135. A 2009 study by Fang and Gunderson found that employment among older workers (50 years of age and up) increased following a minimum wage increase. Campolieti, M., Gunderson, M., and Lee, B. Following the 2021 budget, the Government of Canada reestablished a federal minimum wage for federally regulated industries on December 29, 2021. [22] Many countries, such as Norway, Sweden, Finland, Denmark, Germany, Austria, Italy, and Cyprus have (or had) no minimum wage laws, but rely on employer groups and trade unions to set minimum earnings through collective bargaining. [27], The European Commission introduced an infringement procedure against France and Germany on 19 May 2015, arguing that the application of these laws in the transport sector had a disproportionately restrictive impact on the freedom to provide services and the free movement of goods, two of the principal freedoms on which the European Union is based. What are the advantages of continuing to define the federal minimum wage in this way? (2017). The horizontal axis starts at 0 and ends at 12 with ticks every 2 points. There is unfortunately no Canadian research on the length of time spent working at minimum wage. This is a bar clustered chart. This is a column clustered chart. The minimum wage was lifted to $12.75 on April 1, 2022, and there was an additional increase of $1.00 on October 1, 2022. MINIMUM WAGE. Source: 2015 Federal Jurisdiction Workplace Survey and 2017 Labour Force Survey. Soon after, the Colony of Victoria, at the time a self-governing part of Australia, introduced its own minimum wages. In addition, the number of incidents of non-compliance is generally higher than average in industries such as trucking where wages are paid on a basis other than time (for example cents per kilometer, commission sales with or without a base rate or piecework). Labour Programs 2017-2018 consultations on modernizing federal labour standards, The effects of minimum wages on employment: The legacy of Myth and measurement, Fairness at work: Federal labour standards for the 21st century, Trends in U.S. wage inequality: Revising the revisionists, Minimum wages and human capital investments of young workers: work related training and school enrolment, The impact of minimum wages on labour market transitions, Dispelling minimum wage mythology: The minimum wage and the impact on jobs in Canada, 1983 to 2012, The impacts of minimum wage increases on the Canadian economy, Ontarios proposed minimum wage hike: An economic assessment, Minimum wage impacts on youth employment transitions, 1993-1999, The (non) impact of minimum wages on poverty: Regression and simulation evidence for Canada, Skill-based technological change and rising wage inequality: Some problems and puzzles. Trends in U.S. wage inequality: Revising the revisionists. About one-third of minimum wage workers in the FRPS and in Canada overall are immigrants. The title of series 1 is "SEPHManufacturing." In the FRPS, about 17% of minimum wage employees say that they are covered by a collective bargaining agreement, compared to 10% of such employees in Canada as a whole (Table 8). Please contact us and let us know how we can help you. Neumark et al. This can negatively impact workers with less experience or education, such as teenagers. The reason given is: policy changes and inflation are not adequately reflected; inconsistent use of current and outdated minimum wages limits the ability to accurately compare countries. This would be a one-time effect on GDP growth, after accounting for multiplier effects. Minimum Wage by Country 2023 - 2023 World Population by Country (Live) of year based on the Consumer Price Index. Human Resources and Skills Development Canada. While not a statistically representative sample, of the 2,453 individuals who responded to the question about whether there should be a common minimum wage for employees working in the federal private sector, 76% said yes, with women and men responding at the same rate. 1 (French only). Approximately two-fifths of low-wage workers are in Ontario. Less than 2 in 10 minimum wage employees in the FRPS are employed on a temporary basis. The Government of Canada has the constitutional authority to set minimum wages only for employees within federal jurisdiction, such as federal public servants and workers in industries that are under federal regulatory jurisdiction, such as banks, airlines and interprovincial railways. The following year1977average hourly earnings peaked at close to $24. Most countries had introduced minimum wage legislation by the end of the 20th century. And estimates for workers over the age of 25 imply essentially zero effects on employment. However, Green also notes that, were B.C. Minimum wages are also set and adjusted in different ways: in legislation or regulations; by the government-of-the-day or an independent board; and based on inflation, average wage rates or other economic factors. The adverse impact would be mitigated as firms increasingly face labour shortages. 1 This definition refers to the binding nature of minimum wages, regardless of the method of fixing them. (See also Statistics Canada.). Minimum wage is calculated and adjusted differently between the provinces and territories (seeProvincial Government in Canada;Territorial Government in Canada). [6] After a study of the minimum wage laws in Australia and New Zealand The Liberal Party acted to set up a minimum wage in the most heavily sweated or underpaid industries, as part of a broad range of social reforms. Throughout the 20th century, provinces and territories established their own minimum wage policies for men and women in the labour force. Thirty-two related to the trucking sector, 5 to First Nations reserves and 4 to parts of the road transportation sector other than trucking, 22 minimum wage violations were determined to be founded by the Labour Program, with 77% of these violations being in the trucking sector, as noted in the statistical profile (see above), there are relatively fewer low-wage workers in the FRPS compared to Canada as a whole, particularly those earning just above the minimum wage. The Countries with the Highest Minimum Wages - World Map / World Atlas A timeline of industrial relations in Australia which outlines significant historical changes. The title of the graph is "Chart 1b Ratio between minimum wage and average hourly earnings." Morissette, R., and Dionne-Simard, D. (2018, June 13). The title of series 4 is "Minimum wage." Brochu and Green (2013), economists from the University of Ottawa and the University of British Columbia, respectively, concluded that when the minimum wage increases, workers of all ages are less likely to be laid off within the first year of a job. US National Bureau of Economic Research. The minimum wage is a basic labour standard that sets the lowest wage rate that an employer can pay to employees who are covered by the legislation. The title of series 2 is "SEPHTotal." The minimum wage is the lowest wage rate that an employer can legally pay its employees and is a core labour standard. The minimum value is 21.7 occurring in 1988. The national minimum wage - Fair Work Commission | Australia's national Revisiting the minimum wage in Atlantic Canada. Each April 1 (resuming in 2024), based on Canada CPI for January through November of the previous calendar year plus, starting in 2024, 1%. Should the minimum wage for employees in the federally regulated private sector continue to be the minimum hourly rate set by the province or territory where the employee is usually employed? Taking inflation into account, the minimum wage peaked in 1976 at just over $11 an hour in Canada. ), Income inequality: The Canadian story. Minimum wage in the United States - Wikipedia A re-analysis of Sabia, Burkhauser, and Hansen. The provincial or territorial minimum wage applies if it is higher. Although 51% of minimum wage employees are employed in FRPS firms with 500 or more employees, these employees make up only 3% of total employees in those firms (Table 4). On The Historically Racist Motivations Behind Minimum Wage Journal of Labor Research, 33(3), 287 to 302. From between 1998 to 2018, 6 out of 10 minimum wage workers were women. Montreal: Institute for Research on Public Policy. The provincial distribution of low-wage workers between the FRPS and Canada is roughly similar (Table 1). The total number of alleged violations (in other words arising from complaints and inspections) can vary fairly significantly from year to year. Fang, T., and Gunderson, M. (2009). Are the effects of minimum wage increases always small? Less than 10% of these low-wage workers are in postal services and pipelines (with the vast majority in the former). Journal of Labor Economics, 20(4), 733 to 783. The title of the graph is "Chart 2 Proportion of employees paid at the minimum wage rate by province, 2014." Reports and publications: Federal labour standards, Minimum wage in the federally regulated private sector. Employers and employer organizations, on the other hand, said that re-establishing a common minimum wage for employees in the federal private sector would run counter to the recent practice of linking minimum wage to the cost of living in each province and territory. [12] The trade unions and the Labour Party adopted this view. However, there are larger negative estimates in the literature, and occasional large positive estimates. Neumark focusses his analysis on the U.S. literature, which is by far the most extensive, partly owing to the ability of researchers to exploit variation in minimum wages across the United States. (PDF version 2.33 MB) Working Paper 18681. $155.25. Theo Anne Opie and Paul Shemilt, HR Answers Now: Employment and Labour Law (2009). In the authors interpretation, employers may tend to substitute older for younger workers with minimum wage increases, which is consistent with findings of decreases in young peoples share of accessions (hiring). The title of series 1 is "SEPHManufacturing." If a freestanding rate were to be adopted, how should it be set, at what level and who should be entitled to it? However, it was until 1890s that the first modern legislative initiatives to regulate minimum wages took place in New Zealand and Australia. The federal government earlier set its own minimum wage rates for workers under its jurisdiction. . This ratio can vary depending on the data source used, but the trends are similar. Do minimum wage increases influence worker health?Working Paper 22578. There are a total of 40 categories in the horizontal axis. It created boards that set minimum wage criteria that were legally enforceable. In addition, several provinces have recently implemented significant increases in their rates, or have announced that they will do so. As time passed, the Justice of the Peace, who was charged with setting the maximum wage, also began to set formal minimum wages. This data comes from the Labour Programs LA2000 system. Labour Force; Unions). A minimum wage constitutes a floor above which employees or their unions may negotiate with management for higher remuneration. Lastly, 20% of employees with less than a high school diploma were paid at minimum wage, compared with 3% of employees who had a university degree. Marchand, J. (1999). Flinn, C.J. The current approach, found in section 178 of Part III of the Code, has two key elements: In addition, section 178 provides for situations where employees are paid on a basis other than an hourly rate. Can't find what you're looking for? It reduced the employment of such labourers by 54,000 (6.5 per cent) in 1929 and 97,000 (13.3 per cent) in 1937. By contrast, 21% of all employees in Canada would be earning less than $15 per hour. Fortin, N., and Lemieux, T. (2016). To be increased to $15.00 on October 1, 2023. We use it to set different rates (called 'special national minimum wages') for certain types of employees, depending on: That minimum wage was introduced as part of the Fair Labor Standards Act (FLSA). Provinces and territories can also implement regulations that allow for certain workers to receive lower minimum wage rates. working in provinces or territories with a minimum wage higher than $15 will receive the higher provincial or territorial rate. The papers do not necessarily reflect the views of the Government of Canada. The history of minimum wage is about the attempts and measures governments have made to introduce a standard amount of periodic pay below which employers could not compensate their workers. Although this does not close the issue, the preponderance of evidence leans that way. Belman and Wolfson also noted that, prior to 2014, most increases in the minimum wage that had been rigorously studied had not been especially large ones. Neumark, D., Salas, J.M.I., and Wascher, W. (2013). Minimum wage law - Wikipedia Territorial Government in Canada). The first legislation in Canada governing minimum wage was introduced in the early 20th century and was intended, at the time, to prevent the exploitation of women and children. List of countries by minimum wage - Wikipedia Federal minimum wage rising to $16.65 on April 1 - Canada.ca Statistics Canada. If a federal minimum wage were to be re-established, how should it be set (for example in the, Would an increase in the minimum wage applicable to employees in the federal private sector to $15 disproportionately benefit anyone? History of the minimum wage - Wikipedia While Canada has undergone important economic, social and technological changes since the 1970s, the minimum wage and the average hourly wage are essentially unchanged. This is a horizontal bar graph, so categories are on the vertical axis and values are on the horizontal axis. British Journal of Industrial Relations, 47(2), 371 to 387. [5] In 1896 in Victoria, Australia, an amendment to the Factories Act provided for the creation of a wages board. (2017). In 1975, the minimum wage represented almost 49% of average hourly earnings, compared with a value of between 42% and 46% in 2014. Any increase in the minimum wage will therefore not bring much additional income to these households and may reduce it if there are negative impacts on hours of work. This proportion was lowest in Alberta, at 1.7%, followed by Saskatchewan at 3.5%. (2016). In 2014, 49% of employees aged 15 to 19 years and 15% of those aged 20 to 24 were paid at minimum wage. The Effects of a Minimum Wage They argue, "The minimum wage lifted out of poverty many families of farm labourers who remained employed, but it significantly lowered the incomes of farmers, particularly during the 1930s. Increases in the minimum wage have been found to increase job stability. [13], In 1912, the state of Massachusetts, United States, set minimum wages for women and children, and some states enacted similar protective laws. Yukonwas Involuntary refers to employees who would like to work full-time but could not find a full-time job whether they looked or not. The spiralling cost of living leaves a family of four with two full-time minimum wage workers with just $73 left after expenses. It established a 'living wage' for a man, his wife, and three children to "live in frugal comfort". By 1950 the minimum wage had risen to $0.75 per hour. [3], By 1902, other Australian states, such as New South Wales and Western Australia, had also formed wages boards.[1]. for employees covered by Part III of the Canada Labour Code. History of the Minimum Wage - ProCon.org Some economists have argued that minimum wage causes unemployment as employers have to reduce the number of work hours to compensate for increased labour costs. Ontario had the highest proportion at 10.9%. Canadian Centre for Policy Alternatives. This is because some employees who were earning above the minimum wage join the ranks of those earning the minimum wage. In addition, Neumark (2017) indicates that teenagers are the most commonly studied group and that there tend to be greater challenges studying non-teenage low-wage workersFootnote 11. The maximum value is 48.7 occurring in 1975 and 1976. Minimum wage impacts on youth employment transitions, 1993-1999. If so, who? Australia's minimum wage was most recently raised on 1 July, 2017, when it was increased from $17.70 per hour to $18.29 per hour. In 1904, the new Commonwealth Government passed a law, strongly backed by unions, to create a system of arbitration. The Vermont independent first introduced a $15 minimum wage proposal in 2015 and then reintroduced with Washington Democratic Sen. Patty Murray in 2017 and 2019. The vertical axis starts at 0 and ends at 30 with ticks every 5 points. Federal Labour Standards Review. The Economic Journal, 123(573), 1203-35. Unions pushed for the 1918 Act to greatly extend the coverage of minimum wages[8] In 1917, Whitley councils or Joint Industrial Councils were established in 41 industries with over 2 million employees to bring together unions and management to discuss not only wages and conditions but also a wide range of related issues such as jobs, security, benefits and technical education. . Minimum wage relative to mean and median earnings. The effect of minimum wages on youth employment in Canada: A panel study (PDF version 101.16 KB). For more than 20 years, the federal minimum wage has been pegged in the Canada Labour Code to the minimum wage rate in the province or territory in which the employee is usually employed. The federal minimum wage was initially set at $1.25 and rose to $4.00 per hour by 1986, at which point it stayed unchanged for the next decade or so. The University of Waterloo economists also found that an increase in the minimum wage is associated with lower employment of prime-aged immigrants. A smaller share of low-wage workers mitigates both the number of workers benefiting from an increase in the minimum wage and the number potentially negatively impacted by any reduction in employment, low-wage workers in the FRPS are only a little more concentrated in larger employers compared to Canada as a whole. What are the disadvantages? Certain limitations should be kept in mind. Real minimum wages Statistics Canada notes that "youth, women and persons with a low level of education were the groups most likely to be paid at minimum wage. Australia and New Zealand Equal Opportunity Law and Practice (2 volumes) Butterworths . Among students, 29% were paid at minimum wage, versus 5% of non-students. British Columbia and Manitoba were the first provinces to introduce minimum wage in 1918. Minimum relative to average wages of full-time workers. Thinking of that amount as additional consumer expenditure without any reduction in business investment, the $122 million represents additional expenditure equal to 0.063% of federally regulated private sector GDP, which itself is slightly less than a tenth of Canadas GDP. In 1975, the minimum wage represented almost 49% of average hourly earnings, compared with a value of between 42% and 46% in 2014. 75-006-X (2014). This was a court that would oversee industrial disputes. Card, D., and Krueger, A.B. Hunting, fishing and wilderness guides minimum wage. There are 3 series in this graph. Other low-wage workers (employees earning above the minimum wage but below $15 per hour) are slightly more common in firms with 20 or more employees compared to those just earning the minimum wage. If there are, what are they and what processes and data and analysis should be used to support the use of this regulatory authority? Prince Edward Island was the last province to pass minimum wage legislation covering both men and women, which it did in 1960. History of The US Minimum Wage - BeBusinessed: No Nonsense Advice, How The effects of minimum wages on employment: The legacy of Myth and measurement (PDF version 464.82 KB). The vertical axis is "percent." Each April 1 (resuming in 2024), based on Canada CPI for the previous calendar year. Neither of these two authorities has ever been used, 345 enquiries related to minimum wage were reported as being received by Labour Program early resolution officers. As part of their 2014 review of the minimum wage literature, Belman and Wolfson considered the research on the relationship between the minimum wage and schooling. A number of studies support the view that the decline in the real value of the minimum wage in the U.S. from the early 1970s into the 2000s was an important factor in the growth of wage inequality (Lee, 1999; Card and DiNardo, 2002; Autor, Katz and Kearney, 2008). Information identified as archived is provided for reference, research or recordkeeping purposes. ILR Review, 70(3), 814 to 818. The vertical axis is "province." Firms, however, decrease their rate of hiring. Krashinsky, H. (2008). Key points: Minimum wage and award rates will lift by 8.6 per cent and 5.75 per cent respectively The pay increases will impact a quarter of the workforce The underlying policy intent for establishing minimum wages varies. 2000, c. 41", "Wages - Employees receiving tips - CNESST", "Order-in-Council 2021/103, Employment Standards Act", https://en.wikipedia.org/w/index.php?title=Minimum_wage_in_Canada&oldid=1160240490. The minimum value is 39.3 occurring in 1978. The law to introduce the minimum wage was passed in 1998 by the Labour government and it came into force the following year. In Budget 2021, the Government of Canada proposed to establish a federal minimum wage of $15 per hour, rising with inflation. The vertical axis starts at 0 and ends at 60 with ticks every 10 points. The largest share of FRPS low-wage workers is made up of dual-earner families, approximately 45% to 50% of low-wage workers (Table 6). Increases in the minimum wage would also reduce the gender wage gap, since women are disproportionately represented among low-wage workers.
