By: Summer Fanous in Toronto, ON
Prabhjeet Kaur was among the first victims of the rise in minimum wages in Ontario at the beginning of the year. She lost her restaurant job while the rest of the province idly debated the pros and cons of higher starting wages.
Immigrating to Canada with her family to pursue her education goals, Kaur admits she is somewhat shielded from real world expenses. She explains, “students don’t know what’s going on [at] a high level. They are giving and taking in the same way.”
Since then she has been able to find work with Walmart as a picker/driver for a little over minimum wage, but is firm in her belief that any benefits are overshadowed by increases in other expenses.
The Fair Workplaces, Better Jobs Act, 2017 legislation has increased the minimum wage in Ontario from $11.60 per hour to $14 per hour, effective January 1, 2018 and will be bumped up to $15 per hour at the same time next year. According to Bill 148, “It will be mandatory for employers to pay: casual, part-time, temporary and seasonal employees, who are doing substantially the same work as full-time/permanent employees, the same rate of pay as full-time/permanent employees."
The wage increase is especially important for single income earners and women with families to provide for. Based on a timeline produced by the Vanier Institute of the Family, two-thirds (66%) of part-time workers are women, a proportion that has not changed significantly over the past three decades. While the raise seems to offer an answer to many of the questions surrounding the Ontario workforce, the solution may not be as simple as it sounds.
Shaemin Ukani came to Canada from London in 1974, today she is the Director of Operations at Arrow Professionals, a company she co-founded over 10 years ago. As an employer, she realizes that the wage increase means the biggest expense on her books becomes staff salaries. She believes business owners will have a harder time balancing their budgets, and in turn, will hire fewer people or take on more work themselves.
Similarly, new graduates or less experienced workers may be shafted since more experienced workers who are on the hunt for a job could be hired to make the same, higher minimum wage. Other disadvantages to employers of the minimum wage increase include “staff reduction, overtime reduction, job elimination, automation, and benefit cuts,” according to Ukani. The cost of living will also rise to accommodate the wage increase, so gas, household items and groceries will go proportionately to make up the difference.
As employers take steps to protect their own profit margins, many minimum wage employees are seeing cuts in hours as well as available positions.
Equal work, equal pay
However not everyone shares negative views about the policy change. Ronia Bellotti immigrated to Canada from Jerusalem in 1986 for a “better life.” Beginning minimum wage jobs as early as the age of 13, she has climbed the ranks to her current position as Superior Court Registrar for the Ministry of the Attorney General. While she worries about how small business owners would cope with having to pay employees more, Bellotti believes the wage increase, especially for immigrant women, is a “positive step forward.”
“Immigrants, single moms or minorities would highly benefit from a wage increase in their everyday life. This may be especially beneficial to working families, as then both mothers and fathers would see a pay raise benefiting the family unit. I do think women make up a large portion of the minimum wage sector, while historically, men have received higher incomes for the same job women do,” Bellotti feels.
Data from 2005 seems to confirm this. Immigrant women of all ages were more likely to be living in a low-income situation than Canadian-born women. Among the immigrant girls and women in an economic family, 20 per cent lived under Statistics Canada's low income cut-off before tax, compared with 10 per cent of the Canadian-born girls and women. The incidence of low income among immigrant girls and women was also somewhat higher than among their male peers (19 per cent).
Fleeing an unsafe town in Pakistan, Huda Alvi and her family immigrated to Canada in the hopes of finding better career opportunities. Her career has evolved from starting her own recruitment company at age 25 to founding Workshops by Huda, an offline space that aims to empower, educate and inspire learning in a whole new way. Alvi notes people with “low skill levels generally have a hard time finding work. If the minimum wage rises, this will also cause companies to think twice about their hiring needs, which will impact jobs that women currently hold.”
Prior to getting used to the customs and workforce in Canada, many immigrant women seek to pick up job skills. On average, immigrants have lower employment rates and incomes than non-immigrants. Even as wages are increased, many ethnic women will still be forced to take on precarious work to make ends meet. Those looking to better their current situations may have to look elsewhere in the form of enhanced personal or professional skills.
However, as employers prepare for the second salary bump upcoming in 2019, only time will tell how Ontario adjusts.
-- Canada's economic development minister Navdeep Bains at a Public Policy Forum economic summit