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Minimum Wage In Canada: Lowest Earners Faring Badly Compared To Other Wealthy Countries

Canada's Minimum Wages Not As High As You Think

Canada’s provincial minimum wages range between $9.95 and $10.54 per hour these days, considerably higher than the U.S.’s federal minimum of $7.25.

But a new analysis at The Atlantic, based on OECD data, shows Canadians aren’t actually doing any better than Americans when it comes to the minimum wage.

That’s because the cost of living is now higher in Canada than it is in the U.S. The loonie is hovering around parity with the U.S. dollar, but prices are estimated to be about 20 per cent higher in Canada.

Adjusted for purchasing power parity (i.e., for the cost of living), Canada’s minimum wage of around $10 falls to around $7.59 U.S., just marginally higher than the U.S. minimum wage.

That’s worse than the “adjusted” minimum wage in the United Kingdom ($8.24 U.S.) or France ($10.17 U.S.), but still better than Japan, at $6.29 U.S.

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Mexico: $0.80 per hour

Minimum Wages Around The World (2013)

One important note about these numbers: Though they may be adjusted for cost of living, they aren’t adjusted for the cost of health care. That makes a big difference in comparisons to the U.S., where low-wage workers often have to fend for themselves when it comes to health coverage.

Workers’ groups argue Canada’s minimum wage is too low. The Campaign to Raise the Minimum Wage recently urged Ontario to raise the wage to $14 per hour.

Adjusted for purchasing power, a $14 minimum wage would amount to about $10.50 U.S., which would make it among the highest adjusted minimum wages in the world.

Liberal economists generally argue that raising the minimum wage is good for the economy, because it increases the amount of money that the country’s lowest-income consumers have to spend. And that, in turn, pushes up retail sales, house prices and other elements of the economy.

But conservative economists argue the opposite: That raising the minimum wage is bad for the economy, because employers will simply choose not to fill certain positions if labour costs are too high.

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