NAPO Fact Sheet

Workers and Poverty

Employment is no longer a guarantee against poverty.

Trends in the workplace

Poverty for those who are employed is caused by several factors including minimum wages that have been frozen for years or only minimal increased, changes in the types of jobs available, an increase in the number of low-paying jobs, wage gaps between men and women and lack of a national employment strategy that includes Aboriginals, youth, people with disabilities, new immigrants and women.

There has been a large increase in the number of precarious, part time, contract, temporary, low-wage jobs over the last several years. This has made it more difficult for people to avoid poverty despite being employed. Workers who earn minimum wage or below $10 an hour often must work two or more jobs and more hours than they needed to in the past to make ends meet.

Canada is now a low-wage country, which means many workers are paid less than two-thirds the median (midpoint) hourly wage. Among industrialized countries our incidence of low pay is second only to the United States. Despite strong economic growth and ballooning corporate profits over the last 10 years, the proportion of jobs paying less than $10 an hour has not decreased since 1986. Anyone making this wage is living in poverty or is at high risk of entering poverty.

Wages

• Real wages have fallen significantly for middle and low-income earners in the last 15 years, especially young families, women and youth.

• For young families between 25-34 years of age in Toronto median wages fell by 18.4% from 1981 to 2001.

• In 2002, 25.3% of Canadian workers were low paid. By comparison only 5% of Scandinavian workers are low paid.

• One person living alone in a major urban centre needs to earn at least $10 an hour at full time, full year work to avoid being poor.

• Two million adult Canadian workers earn less than $10/hr, two-thirds of them women.

• Almost 13% of food bank users in Canada are employed.

• 15.6% of women worked for poverty wages in the first half of 2004 versus 6% of men.

• Working individuals with some paid earnings who were poor have wages 18% below the poverty line.

• Rates of employment are significantly lower for all age groups for persons with disabilities. Persons with disabilities are almost twice as likely as other workers to experience low income (26.6% versus 13.9%).

Today, if you work for minimum wage in Canada you are likely living in poverty or at risk of living in poverty.

Minimum Wage

Minimum wage was first developed to ensure individuals would not experience poverty when employed. Over the last 15-20 years minimum wages have failed to keep pace with rising costs of housing, food, clothing, transportation, utilities etc. causing a devaluing of the purchasing power of minimum wage earnings.

• Women, particularly immigrant and visible minority women, make up 70% of minimum wage employees.

• Alberta, the richest province, has the lowest minimum wage rate at $5.90/hr while Nunavut has the highest at $8.50/hr.

• A person in an Ontario city with a population greater than 500,000 who was earning $7.50 an hour working 35 hours per week for 50 weeks of the year would make $13,125. This is $5,716 below the poverty line ($18, 841).

• Working minimum wage jobs means it is more difficult to qualify for income support such as unemployment insurance.

The National Anti-Poverty Organization
2212 Gladwin Crescent, Unit C7, Ottawa, ON, K1B 5N1
1-800-810-1076