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Indexing plan will keep minimum wage earners in poverty

Updated: Nov 27, 2018

NDP Leader Lorraine Michael says the government’s plan to index the province’s minimum wage to the national Consumer Price Index is a good start but is insufficient.

Today government announced that minimum wage will increase by 15 cents on April 1, resulting in a wage of $11.15 per hour. Government says that future annual increases will be automatic and based on the percentage change in the national Consumer Price Index.

“Tying minimum wage increases to the national Consumer Price Index is inadequate for addressing the cost of living issues here in Newfoundland and Labrador. And annual increases of 15 cents won’t get workers a living wage because the starting wage is still too low,” Michael said.

“We must put a plan in place to get the wage to a level of $15 as soon as possible through increments in addition to indexing the minimum wage to inflation,” she said.

Michael says this indexing plan will not solve the problem of full-time minimum wage earners in this province still coming in below the poverty line, especially due to NL’s higher inflation.

“I’m surprised government would go with the 2017 national CPI of 1.6% instead of the 2017 provincial rate of 2.4% when the government’s own consultation report, Indexing Minimum Wage in Newfoundland and Labrador: Summary, May 2017, states that most participants indicated that future adjustments to minimum wage should be based on changes to the CPI for Newfoundland and Labrador,” Michael said.

Newfoundland and Labrador has the third lowest minimum wage in the country. The NDP has been calling for the minimum wage to increase to $15 an hour by 2021.

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