The minimum wage crossed the long-coveted bar of $15 an hour in Quebec today. A bar qualified as minimum, which now stands at at least $18 for several organizations from the union and community movement in this inflationary situation and this context of erosion of purchasing power.
The general minimum wage rate was increased by $1, or 7%, to $15.25 per hour effective January 1.er may. The rate payable to employees paid by tip increases to $12.20 per hour, an increase of 80¢. The Minister of Labor, Jean Boulet, recalled that the increase in the general rate would benefit 298,900 employees, including 164,100 women. While reiterating its target of a 50% ratio between the general minimum wage rate and the average hourly wage.
Quebec will therefore be overtaken this year by three provinces, led by British Columbia’s $16.75 per hour (due to come into effect in June), Ontario’s $16.55 per hour ( at 1er October) and Manitoba’s $15.30 (as of 1er October too). He will also continue to face pressure from the federal government, which raised its minimum wage from $15.55 to $16.65 on March 1.er last April, in response to a 6.8% increase in the Consumer Price Index (CPI) in 2022.
Ottawa had set the bar high by applying an April 2021 budget measure ordering an increase in the federal minimum wage to $ 15 per hour at the end of December of the same year. This minimum wage affects workers and the wage structure of federally regulated private sector companies and sets a floor. This means that, for workers in banks, postal and courier services, or even interprovincial air, rail, road and maritime transport working in provinces or territories where this salary is higher, the latter is to apply to. Conversely, the amount of $16.65 per hour will prevail, particularly in Quebec. It will thus increase each year on the 1er April, at the rate of the evolution of the CPI of the previous year.
Loss of purchasing power
Already last year, the loss of purchasing power reflected the surge in inflation, but also the time lag in the adjustment of the tax table as well as major social transfer programs, such as the tax credit for solidarity or the family allowance, depending on the cost of living. The rapid and persistent surge in inflation accentuates the scope of this shift in the indexation game. Without forgetting that, under global inflation, hides a more marked rise in the price of basic products such as food and housing, affecting proportionally more the low wage earners.
And in 2023, the apparent decline in the pace of the inflationary surge observed at the start of the year is largely based on a base or year-on-year effect. In publishing the March value for the CPI, Statistics Canada made extensive mention of it. “During the first half of 2022, the global economy was impacted by Russia’s invasion of Ukraine, and Canadian consumers faced a significant price increase from January to June 2022.” Inflation overall as measured by the CPI increased from 5.1% in January to 8.1% in June 2022. As a result, based on this general increase observed during the first months of 2022, the The year-over-year inflation rate therefore appears lower at the start of 2023. However, “even if inflation growth has slowed in recent months, prices remain high. Users should consider the impact of year-over-year effects when interpreting 12-month price changes,” warns Statistics Canada.
By way of illustration, the CPI’s growth rate was measured at 4.3% last March compared to a year earlier. But the rise in the price of food was 8.9% and that of housing, 5.4%. In March 2022, the increase in consumer prices had been 6.7% year-over-year.
Labor shortage
The labor shortage, however, mitigates the effect of erosion. A text from The Canadian Press of April 18 circulated extensively in the media. It said that many companies set their own minimum wage at a much higher level to increase their chances of recruitment. “On the sidelines of the Job and Continuing Education Fair, held on April 19 and 20 in Montreal, an in-house survey conducted by the organizers of the event revealed that many companies will be open to offering much more attractive salaries. to employees who once earned minimum wage in order to convince them to join their ranks. »
“The internal survey we conducted of our exhibitors showed that almost 30% of employers were going to offer $5 to $7 more than the minimum wage which will come into effect on 1er may. I understand through this result that companies have difficulty attracting labor and that one of the arguments to attract them is the salary, “said the Canadian Press the director of L ‘Career Event, Éric Boutié. It is therefore clear that “now the minimum wage is no longer sufficient—and is far from sufficient—to attract human resources, even for unskilled jobs”.