Minimum wage workers

Over the years, minimum wage legislation has become the subject of considerable debate, primarily revolving around whether current rates are too low or too high. On the one hand, some argue that the minimum wage should be increased as an important policy tool for addressing wage inequalities as well as an essential element in helping to meet anti-poverty and social welfare goals. By this reasoning, the minimum wage should be set at a rate where basic needs may be adequately met (Battle 2003; Goldberg and Green 1999; Black and Shaw 1998). On the other hand, the argument is that a minimum wage is a 'killer of jobs' and a 'passport to poverty,' since too high a minimum wage can artificially increase the cost of labour, often to the detriment of the very people it is designed to help (Law 1999). Increases in the minimum wage would reduce the demand for workers (as firms find substitutes for the now more costly labour input) and might also increase the supply of workers (as some would be encouraged to consider jobs that they would previously not have found attractive), resulting in reduced employment and increased unemployment rates (Sarlo 2000; Law and Mihlar 1998; Shannon and Beach 1995).(1) Students with summer jobs in particular were more likely to be working for minimum wage (1 in 5) than others the same age (1 in 7).(8) Indeed, although only 45% of those 15 to 24 employed in the summer were students, they made up 71% of youths working for minimum wage during that time. The growing financial burden of postsecondary education likely encourages many students to take jobs, particularly during the summer months, to help finance their educational and other expenses. However, young workers often lack the job experience or education to command higher wages, or are interested in only short-term employment, leading many of them to accept minimum wage jobs (Statistics Canada 1998). Almost all minimum wage workers were employed in the service sector. Accommodation and food services, in particular, had the highest incidence, with 1 in 6 working at or below minimum wage (Table 5). Working for minimum wage was also prevalent in trade (1 in 12). These industries are characterized by high concentrations of youth and part-time workers. Both groups tend to have less work experience and weaker attachment to the labour force, making them prime candidates for low-paying jobs. These industries often do not require specialized skills and training or a postsecondary education. Lo