The Saskatchewan Federation of Labour (SFL) wants the minimum wage raised to 75 per cent of the average industrial wage, then indexed to inflation.
The SFL made the request in a submission Monday to the Saskatchewan Minimum Wage Board at its meeting in Regina. The average industrial wage in Canada in 2009 was $20.88 per hour; 75 per cent of the average industrial wage would be $15.66 an hour.
But business groups are opposed to indexing the minimum wage to the consumer price index (CPI), which would ensure the minimum wage would always be rising.
Moreover, tying the minimum wage to 75 per cent of the average industrial wage would result in a roughly 70 per cent increase in the current $9.25-an-hour minimum wage.
Since 2008, the province’s minimum wage has increased 16 per cent to $9.25 an hour from $7.95. Alberta has frozen its minimum wage at $8.80, while B.C.’s minimum wage has remain unchanged at $8 per hour.
SFL president Larry Hubich makes no apologies for the SFL’s ambitious goal of virtually doubling the minimum wage from just under $8 an hour two years ago to nearly $16 an hour sometime in the near future.
"It’s been a long-standing policy of the SFL . . . that we need to make some significant moves on the minimum wage. We need to take a look at the benefits of a higher minimum wage. In our estimation, a higher minimum wage is actually good for the economy."
But, in the short term, the minimum wage could be linked to the low income cut-off, which Statistics Canada uses to determine when a family is paying a larger-than-average proportion of its income on the basic necessities of life — food, clothing and shelter.
"We recognize that where (the minimum wage) is now and where 75 per cent of the average industrial wage is, is a pretty significant difference," Hubich said in an interview.
"So, as an interim measure, we are suggesting that (the minimum wage) immediately go to (low income cut-off) — which is between $9.65 and $10 an hour, then index that . . . to gradually increase (the minimum wage) to (75 per cent of the) average industrial wage over time."
Indexing the minimum wage to the Saskatchewan inflation rate ensures low-income workers never fall too far behind the rest of the employed labour force, he added.
But business leaders blasted the idea of linking the minimum wage to CPI or the average industrial wage.
Steve McLellan, CEO of the Saskatchewan Chamber of Commerce, said the chamber’s message to the minimum wage board was simple: "Don’t link the minimum wage to any particular index," McLellan said prior to his presentation to the board.
"Keep it simple," such as an average of provincial minimum wages across the country, he said. "But don’t link it to something. That’s adding complexity to something that doesn’t need it."
Marilyn Braun-Pollon, Saskatchewan vice-president for the Canadian Federation of Independent Business, said the government should forget about raising the minimum wage and cut taxes for low-income earners instead.
"Our focus should be how do we leave more money in low-income earners’ pockets. How do we provide more tax relief to allow them to keep more of their income," she said.
Braun-Pollon said raising the minimum wage is a "blunt tool" that will do more harm than good.
"We’ll see prices increase, all wages will increase, staff hours will be reduced . . . it’s an approach that actually hurts those we’re trying to help."
A spokesperson for Labour Minister Don Morgan said the minister has asked the minimum wage board to look at various indexing options and report back by the end of the year.
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