Manitoba's weak minimum wage leads to poverty, says report recommending $18 living wage

One week after the Manitoba government announced increases in minimum wage in the province, a new report says it will remain far below what is needed for a living wage.

Manitoba's phased-in approach will see the minimum wage go from $11.95 now to $13.50 in October, which will be second-lowest in Canada. A year after that, the hourly rate will go up to $15.

The Manitoba office of the Centre for Policy Alternatives calculates that a family of four, with two working parents, would require a wage of $18.34 per hour in Winnipeg, $15.66 in Brandon and $16.25 in Thompson to maintain a modest standard of living.

For Winnipeg, that's up from the $16.15 the think-tank calculated in its 2020 estimate.

A living wage is based on the principle that full-time work should provide families with a basic level of economic security by providing the income required for a family of four with two parents working full-time to pay for basic needs such as housing, transportation and food.

It should also enable a household to support the healthy development of their children and enjoy social, civic and cultural lives, the CCPA report says.

"The living wage is designed so young adults are not discouraged from having children and older workers have some extra income as they age," the report says.

With the potential for a recession on the horizon due to interest rate hikes and a high inflation rate — which topped 8.1 per cent in Canada in June 2022, the highest rate since 1983 — Manitoba's minimum wage increases poverty across the province, says the report, Manitoba Living Wage: Update 2022.

"A poverty minimum wage is bad public policy, as families who work for low wages must sacrifice necessities to make ends meet, leading to chronic stress and long-term health issues," the report says.

Before setting the minimum wage increases, Manitoba's Progressive Conservative government asked the labour management review committee — a group made up of labour and business representatives — to recommend a new minimum wage, but committee members couldn't reach an agreement. 

Business representatives wanted something in the range of $13-$14 while labour advocated for the $16.15/hour in the CCPA's 2020 report.

"Labour is always going to be on one side and management is going to be on the other," Premier Heather Stefanson said at the time.

'Fair and balanced'

The increases decided on are "a fair and balanced approach to getting to where we think is a competitive place across the country," she said.

A provincial spokesperson told CBC News in an email statement that in addition to the 2023 increase in minimum wage, the PCs have taken action by lowering taxes.

"In the year 2022, we have provided $2,400 in tax relief to the average Manitoban.  For a family of two, that equates to nearly $5,000 in annual tax and fee savings," the statement said, adding that in 2023, the education tax rebate will increase to 50 per cent.

The living wage for a single parent with one child is significantly higher because those families face more challenges around expenses. 

The living wage in Winnipeg for a one-parent, one-child family went up from $21.20 an hour two years ago to $25.28 now.

The living wage for a single-parent, one-child family in Brandon actually decreased over the past two years, dropping from $14.44 to $14.18.

That is largely due to modest increases in the cost of living being more than offset by increased government benefits, including a nearly $150 per month increase in rent assist and nearly $100 more per month in the Canada workers benefit, with both programs being made more generous since 2020, the reports says.

Low wages also allowed families to qualify for a Manitoba childcare subsidy of approximately $133 per month, further reducing the living wage.

The increase in Winnipeg is due to the higher cost of renting an apartment and increases in the other expenses. With the increase in the living wage required to meet those rising costs, those families no longer qualify for government benefits.

The living wage for a one-parent, one-child family in Thompson increased from $14.93 in 2020 to $15.77.

The CCPA research also revealed that Manitoba's minimum wage workers are increasingly educated, established in their jobs and older compared to a decade ago.

"These findings indicate that minimum wage workers more frequently support families, which contradicts assertions that minimum wage workers are teenagers working their first jobs," the report says.

In 2019, almost half of minimum wage workers were over 25, nearly a third had a post-secondary degree, and another third were married or living common law.

And in many cases, adults in the family worked long hours at multiple jobs to make ends meet.

"Surviving on the minimum wage was untenable before the pandemic and is certainly unsustainable now," the report says.