Minimum wage hike not enough to live 'decently', says think tank IRIS

Quebec’s minimum wage rising to $15.25 Quebec’s minimum wage is rising by one dollar to $15.25 per hour. Still, many wonder if it's enough to offset record high inflation.

The increase in the minimum wage, in effect since Monday, is not enough to compensate for the soaring prices that workers at the bottom of the ladder must endure, according to a report published by the Institute for Research and Socio-economic Information (IRIS).

"The least affluent households have been hit hardest by inflation," says researcher Eve-Lyne Couturier in an interview. "Essential goods such as food, housing and transportation account for a larger share of their spending. These three categories are experiencing a greater increase than the average rise in inflation."

By increasing from $14.25 to $15.25 per hour, the minimum wage has risen by 7 per cent. This is comparable to inflation, which is around 6.7 per cent in Quebec. However, inflation has been higher for the consumer basket of the less well-off, the left-wing think tank points out.

The sustainable income for 2023, an indicator developed by IRIS in 2015, for a household with two parents and two young children, increased by eight per cent to twelve, depending on the region where the family lives.

"Not only does the minimum wage not allow people to escape poverty or meet their needs, the increase, which is presented as a significant increase, still impoverishes workers who are on the minimum wage," said Couturier.

A sustainable income includes basic needs, but also the expenses necessary to "live with dignity," including holidays, cultural outings and savings for contingencies.

Sustainable income varies from region to region, as does the cost of living. In 2023, a single person would need between $27,047 and $37,822 to live with dignity in Quebec, according to the IRIS report.

For example, the sustainable income for a single person is higher in Sept-Îles ($37,822) than in Quebec City ($31,104) because of the lack of public transportation. The report notes that a family looking for a four-and-a-half apartment in Gatineau would have to pay 23 per cent more for housing in 2023.

INSPIRATION FROM PANDEMIC AID

Couturier believes that the temporary assistance granted during the pandemic offers solutions for reducing the number of people living below the sustainable income threshold. These aid packages made it possible to reduce poverty in Quebec in an interesting way.

In 2019, 8.9 per cent of the Quebec population did not have enough income to cover basic needs, according to the Market Basket Measure (MBM). This rate had almost halved to 4.8 per cent by 2020.

In addition to the pandemic aid from the federal government, the Legault government also deployed ad hoc aid (the cheques) to combat inflation in 2022.

The researcher believes that Quebec should have found a way to provide permanent relief rather than cutting taxes by one percentage point at the first two levels.

People working at minimum wage full time are going to have a reduction in disposable income at the end of the year of about $400 and people with incomes of $200,000 or more are going to have an increase in income of $2,000 in their pocket.

"We are improving the incomes of people who already have a lot of money and penalizing people who have less access to income, who have lower incomes," she continued.

Public investments in affordable housing and public transit are also a way to facilitate the attainment of a sustainable income since they represent a significant portion of the expenses of the least affluent households, added Couturier.

This report by The Canadian Press was first published in French on May 3, 2023.