Prince Edward Island’s minimum wage will rise to $15 an hour by the end of next year.
On Tuesday, the PEI government announced two increases to the minimum wage that will be implemented over the next year. The first increase will be 80 cents on January 1, 2023, to $14.50 an hour. The second increase will be 50 cents on Oct. 1 of next year, bringing wages to $15 an hour.
The president of the Cooper Institute, a PEI nonprofit that advocates for social change, said the province is making the $15 target a little too late.
“We were talking about a $15 minimum wage five years ago,” Joe Byrne told CBC News.
“This winter we’re asking people to choose between eating or heating, and that’s not a sustainable economic model for anyone. We can’t ask those who provide such essential services … to continue working and living in poverty.”
Byrne said wages should be closer to $18 an hour.
The chamber said the jump was too high
But Robert Godfrey, CEO of the Greater Charlottetown Area Chamber of Commerce, said even $15 is too much for businesses to absorb.
“The chamber supports a modest increase in the minimum wage, I want to make that clear — very high. But we’re talking about an 8.6 percent increase for people making the minimum wage now,” he said.
When was the last time you got an 8.6 percent raise?– Robert Godfrey
“When was the last time you got an 8.6 percent raise?”
The minimum wage was last raised on April 1 of this year to $13.70.
Next year’s increase would mean a 9.4 percent jump over an 18-month period.
The changes were announced on the same day that PEI was identified for another month with the highest inflation rate in the country.
The island’s inflation has been the highest in the country for every month since March 2021, with the annual rate reaching 11.1 percent in May.
The news of the minimum wage hike follows the Employment Standards Board’s annual review process.
The board took submissions from Islanders as part of this review, before reaching its recommendations regarding the amount the minimum wage should increase.
A bump for slightly higher earners?
The increase means even workers making a few dollars above minimum wage will get a bump to keep pace, Godfrey said.
“If you have 10 employees, that adds up really quickly. If you’re a big hotel, that’s tens of thousands of dollars. It’s not small.”
He said he would see an increase in the basic personal exemption for income tax or a decrease in the tax rate for low-income earners.
Asking small business to pay for this is like asking workers to pay for this… We should actually implement a tax system that starts with a fair tax for the rich.– Joe Byrne
Byrne acknowledged that wage increases would be a burden on small business and that a better solution could be found in the tax system. But he focused on the higher end of the spectrum.
“Asking the small business to pay for it is like asking the workers to pay for it,” Byrne said.
“That’s actually the wrong problem. We need to actually implement a tax system that starts with a fair tax for the wealthy.”
Byrne said a 16 percent tax on the country’s wealthiest would provide the necessary funds to guarantee basic income, and is a move toward an economy that works for everyone.