Labour Standards Division
Labour Relations Agency
Beothuck Building, 3^rd Floor
P.O. Box 8700
St. John's, NL, A1B 4J6

November 1, 2004

Dear Minister Burke,

On behalf of the Newfoundland and Labrador Advisory Council on the Status of Women, I am writing in response to Government’s call for submissions regarding the minimum wage review.

The issue of raising the minimum wage is certainly of significance to the women of Newfoundland and Labrador. While incomes are rising in Newfoundland and Labrador, they remain lower than the rest of Canada. Over the last decade, provincial per capita income has consistently been about 25% lower than Canada as a whole (Strategic Social Plan, 2003). The lowest income earners in the province and, consequently, those most vulnerable to poverty, violence, and further exclusion, are women.

Contrary to popular misconceptions, the majority of minimum wage earners are not teenagers but women (64%) who are 19 years or older (61%) (Canadian Centre for Policy Alternatives, 1999). While more women now participate in the labour market, they are more likely to be employed in part-time, temporary or seasonal employment without long-term security, health benefits or pension plans. Women also continue to be clustered in lower-paying, traditionally female-dominated sectors, such as retail, and are vastly under-represented in technology and resource sectors (Hussey, 2003).

Newfoundland and Labrador currently has one of the lowest minimum wage rates in Canada at $6.00 per hour. The lowest rate is in the province of Alberta, where only 1.1% of employees earn the minimum wage of $5.90 per hour or less. Of Newfoundland and Labrador’s workforce of 195,000, over 16,000 employees work at or below minimum wage. At 8.5%, this is twice the national average.

In 2003, nearly two thirds (64%) of minimum wage earners in Canada were women. Despite the fact that women constitute half of the labour force, they are over-represented in all age categories. One in 20 women worked for minimum wage in 2003, compared with 1 in 35 men. The largest group of minimum wage earners in Canada is under the age of 25; 48% aged 15-19; and 15% aged 20-24.

Although women constitute half the employed labour force in the 20-24 age group, they make up the majority (60%) of minimum wage earners in Canada. Women between the ages of twenty-five and fifty-four represent the second largest category of minimum wage workers in Canada (22%). In this province in 2003, 24,000 people worked for $6.00 - 6.99 per hour; 68% of these were women. The majority of low-income earners in Newfoundland and Labrador are women who work in retail and service sectors, usually in entry level, unskilled, non-unionized positions without pension plans, health and other benefits, or opportunities to advance into better positions.

Poverty is a key concern for women, families and communities throughout Newfoundland and Labrador. Women primarily head single parent families and, although the number of children in the province has declined by 30% since 1991, the number of children - and women - living in poverty has not declined at the same rate. During the 1990's about half of all single-parent families were living in poverty. In 1991, women headed over 82% of lone parent families; in 2001, the number of lone parent families had increased, with women still heading 82% (Women’s Policy Office, 2003). In 2002, women headed over 92% of single parent families in subsidized housing in this province (Women’s Policy Office, 2003). Nationally, 56% of single parent families headed by women are poor, compared with 24% for men (Morris, 2002). 41% of single women under 65 live in poverty, while 49% of single women seniors are poor. In our province, nearly 30% of all working women earn less than $7 per hour, and 50% of all working women (both full-time and part-time) earn under $12,000 per year (From the Ground Up). Women also form the majority of individuals who do the unpaid work of childcare, senior care and housework.

Poverty puts women at increased risk of family violence, as lack of economic security and independence often prevents escape from abusive living situations. Women who experience violence within the home often have two choices: violence or poverty. Either "choice" will mean deepened inequality and further vulnerability to violence.

Demographic trends in Newfoundland and Labrador indicate that our population is ageing. Women tend to live longer than men; in 1999, life expectancy was 80.2 years for women, compared with 75.2 years for men (Strategic Social Plan, 2003). The implications for women’s equality will become increasingly evident as the population continues to age, given that women tend to live longer than men, to head single-parent families, to obtain precarious employment and to live with poverty and violence.

Government should consider not simply how much to increase the minimum wage, but how to index wages such that people are living not at or below, but above the poverty line and have the resources and opportunities to fully participate in the social, legal, economic, cultural and political benefits of society.

Maintaining a low-wage economy in Newfoundland and Labrador is not beneficial for people or the economy. Research and experience have shown that gradual, stepped increases in the minimum wage do not cause significant layoffs, and in fact benefit local economies through more consumer spending (Canadian Centre for Policy Alternatives, 1999). Minimum wage workers tend to spend their earnings immediately in their communities, increasing economic activity and making for a stronger economy. Increasing the minimum wage would increase the amount of money workers have in their pockets. This would in turn increase consumer purchasing power and positively impact the economy by increasing business and sales. Raising the province’s minimum wage to ensure a reasonable standard of living would send a strong message that Government is taking steps to reduce poverty and improve the lives of Newfoundlanders and Labradorians.

When setting the minimum wage, we suggest Government focus on meeting standards where, in a fair and inclusive society, individuals working full-time, full-year jobs would not find themselves in poverty. Currently in Newfoundland and Labrador, a single person making $6 an hour in a full-time, full-year position (40 hours per week, 52 weeks per year) would currently earn $12,480 per year. This is below the low income cutoff benchmark of $16,979 in St. John’s, and $13,680 in rural areas. A family of four with both adults working full time at the current minimum wage would earn $24,960 per year. Again, this figure is below the poverty line: for a family of four, the Low-Income Cut-Off in 2003 (before-tax) was $31,952 in St. John’s, and $25,744 rural.

A minimum wage of $8 per hour would bring a single person up to just below the poverty line if working a full-time, full-year job. Minimum wage standards must be reviewed with consideration of the fact that every day in our province individuals - the majority of whom are women - are working full-time throughout the year and earning wages set at below poverty levels.

Minimum wage rates impact on the health of Newfoundlanders and Labradorians. Evidence indicates that certain key factors determine population health: income and social status; social support networks; education; employment/working conditions; social environments; physical environments; personal health practices and coping skills; healthy child development; biology and genetic endowment; health services; gender; and culture. These "social determinants" of health are the best predictors of individual and population health, structure lifestyle choices, and interact with each other to produce health (Raphael, 2003). It is well known that inequality in social and economic status between groups within a given population-greatly affect the health status of the whole. The larger the gap, the lower the health status of the overall population (Wilkinson, 1996; Wilkinson and Marmot, 1998).

The Social Determinants of Health: An Overview of the Implications for Policy and the Role of the Health Sector

Minimum wage rates have an impact on the health of the population of the province overall; the lower the rate, the greater the inequality in terms of good and poor health. Government’s commitment to ensuring minimum wage standards enable all residents of the province to access the basic necessities of life will consequently improve the health of our overall population, particularly women who are most vulnerable to poverty, violence and exclusion.

Exclusion reinforces and further widens existing inequalities; as the number of people who are excluded increases, the well-being of society in general decreases. Poverty, violence, poor health, unemployment and crime are among the costs of inequality, and are linked in a cycle of cause and effect. Poverty leads to exclusion, which then leads to poorer health. This in turn leads to unemployment, further poverty, poorer health and so forth. Breaking this cycle requires the development of inclusive public policy, resources and opportunities and democratic processes based on community participation and development.

In closing, we request that your government increase the minimum wage in Newfoundland and Labrador. Furthermore, we request that your government begin developing a long-term vision and strategy for the provision of a decent and fair living wage, rather than the ongoing exercise of setting minimum wage to poverty thresholds. The Advisory Council and dozens of women’s equality-seeking organizations would be pleased to participate in a long-term planning exercise toward a fair and equitable living wage.

Thank you for the opportunity to have input on the minimum wage review.

Respectfully,

Joyce M. Hancock
President

Sources:

Cantano, J. (2000). Social and Economic Inclusion. Maritime Centre of Excellence in Women’s Health.

Edwards, P. (2003). The Social Determinants of Health: An Overview of the Implications for Policy and the Role of the Health Sector. Health Canada.

Federal/Provincial/Territorial Ministers Responsible for the Status of Women (2001). Women’s Economic Security and Independence: A Federal/Provincial/Territorial Strategic Framework. Federal/Provincial/Territorial Ministers Responsible for the Status of Women.

Goldberg, M. & D. Green (1999). Raising the Floor: The Social and Economic Benefits of Minimum Wages in Canada. BC: Canadian Centre for Policy Alternatives.

Hussey, J. (2003). The Changing Role of Women in Newfoundland and Labrador. St. John’s: Royal Commission on Renewing and Strengthening Our Place in Canada, Government of Newfoundland and Labrador.

Morris, Marika (March 2002). Women and poverty. CRIAW Fact Sheet.

Raphael, D. (2003/02). Addressing the Social Determinants of Health in Canada: Bridging the Gap Between Research Findings and Public Policy. Paper given at The Social Determinants of Health Across the Life-Span Conference, Toronto, November 2002.; article in Policy Options, 35-44.

Royal Commission on Renewing and Strengthening Our Place in Canada (2003a). Our Place in Canada: Main Report. St. John’s: Office of the Queen’s Printer, Government of Newfoundland and Labrador.

Smith, Michelle A. and Cheryl Bennett (January 2004). Equality, Inclusion and Violence-Free Communities: Critical Cornerstones for Social and Economic Prosperity. St. John’s: Regional Coordinating Coalition Against Violence (Eastern Avalon).

Statistics Canada (2003). Labour Force Survey. Newfoundland and Labrador Statistics Agency.

Statistics Canada (2004). Perspectives on Labour and Income, Vol. 16, Issue 2, Summer 2004 Ottawa: Statistics Canada

National Council of Welfare (2004). Income for Living? Reports, Vol. 120, Spring 2004. Ottawa: National Council of Welfare.

Strategic Social Plan Office (2003). From the Ground Up. St. John’s: Strategic Social Plan Office, Government of Newfoundland and Labrador.

Violence Prevention Initiative (2002). Violence against women. Fact Sheet. Retrieved August 20, 20004 from: http://www.gov.nl.ca/vpi/facts/women.html.

Wilkinson R. (1996). Unhealthy Societies: The Afflictions of Inequality. New York: Routledge.

Women’s Policy Office (2003). Annual Report 2002-2003. St. John’s: Women’s Policy Office, Government of Newfoundland and Labrador.