Low Income Earners In Canada – The Minimum Wage, Students, and Temp Agencies

This week, I was fortunate enough to have a great conversation with my Conservative Member of Parliament over democratic reform in Canada, including our thoughts on the Senate, first-past-the-post electoral reform, and youth voter engagement. On some things we agreed, although on others we did not; overall it was an enlightening conversation and an interesting view into the mind of an MP. I will hopefully write a longer piece soon about our thoughts on Canadian democracy, but it was the other subject we talked about – labour in Canada – that I must turn my attention to first.

The subject of the minimum wage in Ontario came up towards the end of our meeting, and in the brief conversation which followed the Member revealed that he was sadly rather ignorant on the subject. Firstly, he did not know what the minimum wage was in Ontario at present, and, more importantly, he was very out-of-touch with the realities of low income work in Canada. I do not mean to personally disparage the Member, and it should be pointed out that after I explained many of the realities facing low income and precariously employed individuals he seemed legitimately concerned. His lack of awareness does reflect two basic facts however: 1) that the Conservative Party does not stand for worker’s or the working class, and 2) that the overall narrative of low income workers in Canada is inconsistent with the realities. The Member merely represents the white, male, middle-aged, wealthy demographic that controls not only the levers of power but also the cultural discourse in Canada, and it is that discourse that must change, and fast.

Most of what we think about low wage workers in Canada is wrong. While many are young, a surprising amount of those earning under $15/hr are older, often bearing the responsibilities of paying rent and other bills as well as caring for dependents. The minimum wage is not enough to live on, especially when dependents are factored in. Low income earners are disproportionately women and/or visible minorities. An increasing number of workers face uncertain hours and few legal rights, and are often exploited by temp agencies, where they receive no benefits and sub-standard pay; many are subject to termination without cause. Students that work tend to be low income earners, and an increasing number of students are forced to work and work for longer hours while in school, faced with the reality that a full-time summer job at minimum wage will not cover their yearly tuition. And, perhaps most importantly, the number of workers earning a low income is growing, and fast, while full-time, permanent jobs are growing at a much lower rate and unionized jobs are quickly becoming an exception rather than the rule.

This post is intended to highlight three different plights: that of workers earning less than the living wage, that of student workers, and that of temporary workers. These three groups are highly interconnected and face many of the same challenges, though there are different concerns for each. Individual workers may fall into one or all of those categories, but it is important to remember that all workers are affected by the status of low income earners – not only are they our neighbours and our friends, but they are crucial to our manufacturing and service industries, our economic production and consumption, and they are our fellow tax-payers. It is in everyone’s interest, for both financial and moral reasons, to pay attention to the concerns of low income earners and to help them in whatever ways we can.

Minimum Wage

The minimum wage is too low, and it has not kept up with inflation. While a relatively small percentage of workers are actually working at the minimum wage, a growing number are near it, and earn below the “living wage” of about $15/hr. More and more Ontarians are working low wage, temporary, or part-time jobs.

When I spoke to my MP about minimum wage he gave me his own story that is typical of the minimum wage narrative: his first job was for minimum wage, but it allowed him to pay his way through university and it gave him important experience and references that helped him when he entered the job market after graduation. This is also my own experience with low income work so far, in that I depend on my own low-wage job to support my education – fortunately, all of my other expenses (housing and food) are covered by my family, because I am lucky enough to live at home. That being said, students and youth are far from the only people working for minimum wage or a wage below a living wage of around $15/hr.

I personally know many individuals working for below $15/hr that are adults faced with paying rent every month. Many have children, or other dependent family members, that rely on the income earned by that person. Many of those earning less than a living wage are not students at all, but older folks whose sole source of income is their low-wage job. Women and visible minorities are disproportionately likely to earn less than a living wage (at least in the United States), and low-income earners tend to come from economically disadvantaged backgrounds. The most disadvantaged among us, including those with mental illness, physical disability, or those suffering from addiction are also far more likely to live in poverty and earn less. Low income earners are not “just” students paying for their schooling, and it is time to address that reality.

Students and Youth

Even for students, the incomes they tend to earn are too low. A full time (40 hrs/week) summer job (16 weeks) at minimum wage in Ontario will not earn enough to cover tuition for two full terms of university education. Students are thus forced to work – and work more hours – throughout the school year, which, while it admittedly has some benefits, is likely detrimental to academic performance. This situation in particular is hard for students from economically disadvantaged backgrounds who cannot rely on family help to cover school-related costs, as they are forced to work more or take on larger debts; it is also particularly challenging for those who aspire to graduate or professional post-graduate programs, which demand a solid academic record.

While more students are working, the realities of financing university education require more students to turn to borrowing. As a result of drastically higher tuition costs, the disparity between regular inflation and the minimum wage, and a higher number of students attending Canadian colleges and universities, we know face a major debt crisis amongst Canada’s youth. Young people feel forced to attend colleges, but even while working part-time cannot afford post-secondary education and its related expenses, and are thus forced into debt. This has created and will continue to create a generation that is in debt from the time they enter the labour market, meaning they are forced into delaying marriage, car and home purchasing, and in many cases are obliged to take lower income jobs to pay off their debts, reducing the potential tax base.

The non-tuition expenses that accompany higher education are the silent killers – they are often the cause of student debt, and are rarely considered by prospective students and their families or by policy makers. Tuition is high enough, but in university towns like my own rent prices can be outrageous, and the high numbers of students make even low paid jobs highly competitive. Students who are forced to attend school far from their parent’s homes, either by virtue of their program of study or because of poor home life, are thus obligated to pay nearly $45,000 more than a student who has the good fortune (or, occasionally, good sense) to live at home. Rent and food for students are a political non-issue, despite the fact that they are a major reason student debt is so astronomically high in Canada and across the Western world. (Tuition cutting costs and reimbursement, meanwhile, are frequent targets of political campaigns).

Temp Work

When students have graduated, often despite working part-time and facing sometimes more than $20,000 in debt, what are their prospects? For an increasing number, temporary work or internships are a reality. While this issue has been a feature of student rants and pop-culture jokes for years, there is a dark side to temporary work in Canada that has largely been ignored.

Increasing numbers of workers, both educated and uneducated, skilled and unskilled, are faced with employment through temp agencies, which staff client organizations for as long as the client needs. In theory these agencies allow manufacturers and businesses to meet short-term growths in staffing needs – they can get the employees they need for a short time without the hassle of a longer term contract or the legal guarantee of full-time employment. In return the temp agency gets a fee for renting out their employee (the actual worker, who is employed by the agency, not the company they will do the work for), who receives a part of the fee as their wage. Workers often do not know the fee, and tend to work for significantly less than their full-time counterparts employed directly by the company. The worker has essentially no rights, and is liable to be terminated without cause.

Most troublingly, temp agencies are increasingly meeting long term staffing needs for their clients, resulting in workers staying at the same company for long periods of time without ever receiving a raise or benefits as basic as sick leave, paid vacation days, or the right to long term employment. Many workers don’t know how long they’ll be at a job, don’t know what hours they will be working, and don’t know their legal rights, which are already inadequate.

In Ontario, the government has investigated many of these temp agencies and found them to be breaking employment law, but in several cases has continued to pay them to meet their own staffing needs.

Temp workers face dangerous conditions, have few rights, and cannot unionize. In my own experience, they are often immigrants or young people struggling to find full time work. The ill-treatment and poor wages they receive are not even close to fair compensation for the service they provide to their employers, but they, and low income earning workers, feel “a dime a dozen”, and bear their burdens in solitude, having little other choice.

Is Change Possible?

There are no easy solutions to these problems, even raising the minimum wage is a sticky issue, politically and economically. A few interesting solutions have been proposed, including introducing local minimum wages and guaranteed minimum income programs, but again, there’s a long way to go. However, until we can change the discourse around poverty and low income work in Canada by grasping the reality of the situation, we face no solutions, only growing problems.


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About ryanmikeorr

I write at https://doonpress.wordpress.com/
This entry was posted in Politics and Society and tagged , , , , , , , , . Bookmark the permalink.

2 Responses to Low Income Earners In Canada – The Minimum Wage, Students, and Temp Agencies

  1. Pingback: The Stories We Don’t Hear: Same Events, Different Spins | doonpress

  2. Pingback: Reclaiming the Working Class | doonpress

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