Post-Secondary Education, Training and Labour Prepared May 2018 2018 New Brunswick Minimum Wage Report
Contents Section 1 Minimum Wage Rates in New Brunswick... 2 1.1 Recent History of Minimum Wage in New Brunswick... 2 1.2 The Actual Minimum Wage Rate and the Minimum Wage Rate in 2017 Dollars... 2 1.3 The Minimum Wage as a Proportion of Provincial Median Wage... 3 Section 2 Minimum Wage Earners in New Brunswick... 4 2.1 2017 Profile... 4 2.2 Ten Year Trends (2008 to 2017)... 5 Section 3 Canadian Comparisons... 7 3.1 Minimum Wage Rates in Canada... 7 3.2 Percentage of Employees Earning Minimum Wage... 8 Section 4 Cost Of Living... 9 4.1 Consumer Price Index... 9 4.2 Consumer Price Index Growth Rate, 2007 to 2017... 9 4.3 Percentage Change in Total Consumer Price Index for Canada and Provinces, 2016-2017... 10 Section 5 Economic Conditions... 11 Page 1 of 11
The New Brunswick Minimum Wage Report provides basic information about changes to the provincial minimum wage rate, minimum wage earners, the cost of living and economic conditions in the province, as well as comparisons with other Canadian provinces and territories. Section 1 Minimum Wage Rates in New Brunswick 1.1 Recent History of Minimum Wage in New Brunswick The minimum wage rate in New Brunswick is currently set at $11.25 per hour. Over the last ten years, there have been 10 changes to the minimum wage rate: Changes to Minimum Wage in New Brunswick Since 2009 Date of Change Minimum Hourly Wage Rate April 15, 2009 $ 8.00 September 1, 2009 $ 8.25 April 1, 2010 $ 8.50 September 1, 2010 $ 9.00 April 1, 2011 $ 9.50 April 1, 2012 $ 10.00 December 31, 2014 $ 10.30 April 1, 2016 $ 10.65 April 1, 2017 $ 11.00 April 1, 2018 $11.25 Source: EDSC Minimum Wage Database 1.2 The Actual Minimum Wage Rate and the Minimum Wage Rate in 2017 Dollars 1 As shown in the graph on the following page, the minimum wage rate in 2017 dollars peaked in late 1976 at $11.74 per hour, followed by a sharp decrease to a low point of $6.97 per hour in 1989. During this period, although the actual minimum wage rate was increasing, those changes did not keep pace with inflation, resulting in lower real wages for minimum wage earners. Over the next 18 years, up to 2006, the minimum wage rate in 2017 dollars remained just below $8.00 per hour which means that changes in the actual rate kept pace with inflation during this time but the purchasing power of minimum wage earners did not increase over this period. In 2006, the rate in 2017 dollars began a steady increase, rising to $10.71 per hour in 2014, thus representing a time when changes in the actual minimum wage rate exceeded inflation, resulting in real wage increases. Even with these increases, the minimum wage rate in New Brunswick has not reached, in real terms, the peak from 1976. Since 2012, 1 The minimum wage in current (2017) dollars represents the real value of the minimum wage rate over time by adjusting for inflation. Minimum wage rates are rounded to the nearest $0.05. Page 2 of 11
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1974 1980 1986 1992 1998 2004 2010 2016 $ per hour increases in the actual minimum wage rate have kept pace with but not exceeded inflation, resulting in stable real wages for minimum wage earners. $12 Actual Minimum Wage Rate and the Minimum Wage Rate in 2017 Dollars (New Brunswick) $9 $6 $3 $0 Actual Minimum Wage Rate Minimum Wage Rate in 2017 Dollars Source: EDSC Minimum Wage Database and Statistics Canada, CANSIM Table 326-0021 1.3 The Minimum Wage as a Proportion of Provincial Median Wage Median wage is the midpoint hourly wage rate, where half of New Brunswick employees earn more and half earn less. The minimum wage expressed as a proportion of median wage is a measure used to understand how the minimum wage relates to all wages in the economy. As shown in the graph below, the minimum wage as a proportion of the provincial median wage increased from 2007 to 2012, before decreasing somewhat and then fluctuating around the same level from 2013 to 2018. 70% Minimum Wage as a Proportion of Median Wage (Monthly) January 1997 to April 2018 (New Brunswick) 60% 50% 40% 30% Sources: ESDC Minimum Wage Database and Statistics Canada, CANSIM Table 282-0071 In 2017, New Brunswick had the second highest minimum wage as a share of median wage among Canadian provinces, behind Prince Edward Island. This was largely the result of wages in the province being low in comparison to those of the other provinces; in 2017, New Brunswick had the second lowest median hourly wage, behind Prince Edward Island. Page 3 of 11
In April 2018, the minimum wage as a percentage of the median wage in New Brunswick was higher for certain groups: 88% for youth aged 15-24; 59% for women compared to 54% for men; and 91% for part-time employees compared to 54% for full-time employees. Section 2 Minimum Wage Earners in New Brunswick 2.1 2017 Profile In 2017, there were 22,500 minimum wage earners in New Brunswick, representing 7% of all employees in the province. In 2017, almost one third (31%) of teenage and young adult employees (ages 15 to 24) earned minimum wage, while only 3% of employees at the core working-age (25-54) and 4% of employees 55 years of age or older earned the minimum wage. In 2017, employees earning minimum wage worked an average of 26 hours per week. This is compared to an average of 37 hours per week for all employees. The gap in work hours is largely the result of job type, since there is a higher proportion of part-time employment at the minimum wage rate compared to total employment. Full-time minimum wage employees worked the same (40) usual hours per week as all full-time employees. Employees working in part-time positions at the minimum wage rate had slightly lower average usual hours of work per week (15) compared to all part-time employees (17 hours per week). The majority of minimum wage earners in the Province were living in a household with others. Over a quarter (26%) of minimum wage employees in NB in 2017 were part of a couple. A very small share (2%) of minimum wage employees had a spouse that was also earning minimum wage, while 13% had a spouse that was earning more than minimum wage and 8% of minimum wage employees had a spouse that was not employed (the majority of whom were of retirement age). In 2017, 55% of New Brunswick s minimum wage employees were a son or daughter who was living in their parents household. This included 43% that were teenagers in school (15-19) and 12% that were teenagers not in school. 6% were young adults in school (20-24) and 19% were young adults not in school. 5% were adults aged 25+ who are not in school. In 2017, 12% of New Brunswick s minimum wage employees were unattached. 7% were living alone, while 5% were living with non-relatives. A small proportion (6%) of minimum wage employees were the head of their family, with no spouse present. This included 3% of New Brunswick s minimum wage employees (approximately 700 individuals) who were single parents with at least one child aged 18 years or less. Page 4 of 11
The dominant groups of minimum wage earners in the province are teenagers or young adults, women, part-time employees, permanent employees, non-unionized employees and those who had a high school diploma or less: 37% were between the ages of 15 and 19, with another 23% between the ages of 20 and 24. 57% were female. 55% worked part-time. 96% were not unionized. 64% were permanently employed. 52% had more 12 months or more of job tenure. 32% had not completed high school (or equivalent). 41% had completed high school but had no post-secondary education credential. 27% had completed a post-secondary education program. 73% worked in sales or service occupations. 35% worked in retail trade. 27% worked in accommodation and food services. 2.2 Ten Year Trends (2008 to 2017) Changes in the Distribution of Subgroups of Minimum Wage Earners (New Brunswick, 2008 to 2017) Subgroups Age Groups: Percentage of Minimum Wage Earners in 2008 Percentage of Minimum Wage Earners in 2017 Difference Age 15 to 19 50.9% 37.2% -13.7 (% pts) Age 20 to 24 14.5% 23.0% +8.5 (% pts) Age 25 to 54 26.4% 26.5% +0.1 (% pts) Age 55+ 8.2% 13.3% +5.1 (% pts) Gender: Male 41.4% 42.9% +1.5 (% pts) Female 58.6% 57.1% -1.5 (% pts) Employment Type: Full-time 42.7% 45.3% +2.6 (% pts) Part-time 57.3% 54.7% -2.6 (% pts) Job Permanency: Permanent 68.4% 64.4% -4.0 (% pts) Temporary 31.6% 35.6% +4.0 (% pts) Union Coverage: Unionized 3.8% 4.4% +0.6 (% pts) Not Unionized 96.2% 95.6% -0.6 (% pts) Page 5 of 11
Subgroups Job Tenure: Percentage of Minimum Wage Earners in 2008 Percentage of Minimum Wage Earners in 2017 Difference Less than 1 Year 49.7% 47.6% -2.1 (% pts) 1 to 5 Years 37.6% 37.8% +0.2 (% pts) Over 5 Years 12.7% 14.7% +2.0 (% pts) Education Level 2 : Less than High School 47.4% 32.0% -15.4 (% pts) High School Diploma 34.6% 41.3% +6.7 (% pts) Post-Secondary Credential 17.9% 26.7% +8.8 (% pts) Occupation: Sales & Service Workers 73.2% 72.9% -0.3 (% pts) Source: Labour Force Survey, Special Run Data Over the past ten years, the proportion of minimum wage earners with the following characteristics increased: Young adults (aged 20-24); Older workers (55+); Full-time employees; Temporary employees; Employees with job tenure of over 5 years; Employees with a High school diploma; and, Employees with a post-secondary education credential. Over the same time period, the proportion of minimum wage earners with the following characteristics dropped: Teenagers; Part-time employees; Permanent employees; Employees with less than one year of job tenure; and, Employees with less than a high school diploma. 2 Based on Labour Force Survey definitions where the Education level is the highest level of education completed. Page 6 of 11
Section 3 Canadian Comparisons 3.1 Minimum Wage Rates in Canada As of April 1, 2018, New Brunswick had the eighth highest minimum wage rate across Canada and represented the mid-point among the provinces. Minimum Wage by Province as of April 1, 2018 Jurisdiction Minimum Wages as of April 1, 2018 Ontario $ 14.00 Alberta $ 13.60 Northwest Territories $ 13.46 Nunavut $ 13.00 Prince Edward Island $ 11.55 Yukon $ 11.51 British Columbia $ 11.35 New Brunswick $ 11.25 Quebec $ 11.25 Manitoba $ 11.15 Newfoundland and Labrador $ 11.15 Nova Scotia $ 11.00 Saskatchewan $ 10.96 $15.00 New Brunswick Minimum Wage (Annual, Year-end) Compared to Highest and Lowest Minimum Wages of the Provinces $12.50 $10.00 $7.50 $5.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Lowest MW Highest MW NB MW Note: Territories were excluded as the higher cost of living associated with living in these areas typically leads to higher minimum wages. 2018 increases that have been announced were included in this chart. Page 7 of 11
3.2 Percentage of Employees Earning Minimum Wage In 2017, most provinces had between 6% and 8% of employees earning minimum wage. New Brunswick s share of minimum wage employees was on par with the average in Atlantic Canada. Prince Edward Island had the highest share of minimum wage earning employees and Saskatchewan had a much lower percentage of minimum wage earning employees than the other provinces. Percentage of Employees Earning Minimum Wage (2017) 6.5% 6.9% 8.5% 7.2% 7.2% 7.4% 6.4% 6.2% 2.9% 6.2% 5.1% Canada NL PE NS NB QC ON MB SK AB BC Source: Labour Force Survey, Special Run Data While the Canadian average has remained relatively constant over the past several years, this percentage has been slightly more volatile within New Brunswick. In New Brunswick, the percentage of employees earning minimum wage peaked in 2012 (following a series of six increases between 2009 and 2012). The percentage of employees earning minimum wage in New Brunswick declined for three consecutive years (during which time, the minimum wage in the province was only increased once by $0.30 per hour) between 2012 and 2015. Since 2015, the percentage of New Brunswickers earning minimum wage has increased, to 7.2% in 2017. This coincides with small, inflationary increases to the minimum wage rate in recent years. Percentage of Employees Earning Minimum Wage by Province (2012 to 2017) Geography 2012 2013 2014 2015 2016 2017 Canada 3 7.2% 6.9% 7.2% 7.1% 6.9% 6.5% Atlantic Canada 9.0% 6.8% 6.0% 6.5% 6.6% 7.2% New Brunswick 9.7% 8.0% 6.7% 6.0% 6.6% 7.2% Ontario 9.6% 9.3% 10.9% 10.6% 9.2% 7.4% Alberta 1.9% 1.8% 1.9% 2.7% 4.5% 6.2% Source: Labour Force Survey, Special Run Data Alberta, which has historically had one of the lowest shares of employees earning minimum wage, has seen their share of minimum wage earners rise over the past few years as their minimum wage rate has increased significantly. The share of minimum wage employees in Ontario has decreased over the past few years, despite small, inflationary increases made during that time. Ontario has historically had among the highest share of minimum wage employees in Canada. The share of minimum wage employees in Ontario will likely be impacted by their 2018 and 2019 increases to $14.00 and $15.00 per hour. 3 Based on Labour Force Survey definitions where the total for Canada is the sum of the provincial estimates. Page 8 of 11
Section 4 Cost Of Living 4.1 Consumer Price Index The Consumer Price Index (CPI) is a measure of inflation from the perspective of a typical Canadian consumer. It is calculated by averaging the changes in the price of a fixed basket of consumer goods and services, each of which is weighted according to consumer spending patterns. Basket weights are updated every two years based on Statistics Canada s Survey of Household Spending. As shown in the table below, the price of consumer goods and services in New Brunswick increased by 2.3% between 2016 and 2017. The category of consumer spending that increased the most was alcoholic beverages and tobacco products, which increased in price by 9.0%. Beyond this, there were moderate increases to the cost associated with transportation (+4.6%) and recreation, education and reading (+3.8%), along with modest increases to the costs associated with household operations, furnishings and equipment (+1.2%); health and personal care (+2.1%); shelter (+2.2%); and clothing and footwear (+2.6%). The price of food declined slightly during this time period (-1.3%). Change in CPI by Product Group (New Brunswick, 2016-2017) New Brunswick Total CPI and Product Groups Percentage Change from 2016 to 2017 Basket Weights in 2015 All-items +2.3% 100.0% Food -1.3% 16.1% Shelter +2.2% 22.3% Household operations, furnishings and equipment +1.2% 14.6% Clothing and footwear +2.6% 5.3% Transportation +4.6% 22.8% Health and personal care +2.1% 5.0% Recreation, education and reading +3.8% 11.1% Alcoholic beverages and tobacco products +9.0% 2.8% Sources: Statistics Canada, CANSIM Table 326-0021 and 326-0031 4.2 Consumer Price Index Growth Rate, 2007 to 2017 Over time, CPI growth in New Brunswick has been similar to that seen throughout Canada. During the 2008-2009 recession, there was only a slight increase in the cost of consumer goods and services. Between 2007-2008 and 2016-2017, there were four years where CPI growth in New Brunswick was above 2% but the growth in CPI for the majority of the past decade was below 2% per year. Page 9 of 11
CPI Growth for Selected Geographies (2007/08 to 2016/17) Geograpy 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 Canada +2.3% +0.3% +1.8% +2.9% +1.5% +0.9% +2.0% +1.1% +1.4% +1.6% Atl. Canada 4 +2.6% +0.1% +2.2% +3.6% +1.9% +1.2% +1.7% +0.4% +1.9% +1.8% NB +1.7% +0.3% +2.1% +3.5% +1.7% +0.8% +1.5% +0.5% +2.2% +2.3% Source: Statistics Canada, CANSIM Table 326-0021 4.3 Percentage Change in Total Consumer Price Index for Canada and Provinces, 2016-2017 Canadians paid 1.6% more for consumer goods and services in 2017 than they did in 2016, roughly twothirds the increase seen in New Brunswick of 2.3%. All 10 provinces experienced an increase in the costs of consumer goods and services. New Brunswick has not experienced negative CPI change over the past 30 years. Percentage Change in Total CPI for Canada and Provinces, 2016-2017 +1.6% +2.4% +1.8% +1.1% +2.3% +1.0% +1.7% +1.6% +1.7% +1.6% +2.1% Canada NL PE NS NB QC ON MB SK AB BC Source: Statistics Canada, CANSIM Table 326-0021 4 CPI for Atlantic Canada was calculated as the weighted average of the CPI values of the four individual provinces, based on population. Page 10 of 11
Section 5 Economic Conditions Following the beginning of the great recession in 2008-2009, both Canada and New Brunswick saw a year-over-year reduction in real Gross Domestic Product (GDP) 5. The impact of the recession continues to be felt by the provincial economy. Following 2008-2009, New Brunswick s real GDP growth has trailed the national average every year with the exception of 2014-2015. Employment levels have declined every year in New Brunswick since 2008 with the exception of a small increase between 2012 and 2013. New Brunswick s unemployment rate increased from 8.5% in 2008 to a high of 10.3% in 2013. Since 2013, the unemployment rate has decreased for four consecutive years, although decreases in employment during these years suggest that this was largely due to individuals leaving the labour force. In 2017, the unemployment rate in New Brunswick was 8.1%. Real GDP Growth for Selected Geographies (2007/08 to 2016/17) Geography 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 Canada +1.0% -2.9% +3.1% +3.1% +1.7% +2.5% +2.9% +1.0% +1.4% +3.0% Atl. Canada +0.5% -3.3% +3.2% +1.2% -1.9% +1.4% +0.2% +0.8% +1.3% +1.8% NB +0.8% -1.4% +2.0% +0.3% -1.1% -0.3% +0.1% +2.4% +1.2% +1.9% Note: 2017 real GDP data is preliminary and is subject to change Source: Statistics Canada, CANSIM Table 384-0038, 379-0030 and 380-0064 Employment Growth for Selected Geographies (2007/08 to 2016/17) Geography 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 Canada +1.4% -1.7% +1.4% +1.5% +1.3% +1.5% +0.6% +0.8% +0.7% +1.9% Atl. Canada +1.1% -0.9% +0.8% +0.9% +1.1% -0.1% -0.9% -0.4% -0.7% -0.2% NB +0.9% -0.2% -0.5% -0.7% -0.7% +0.4% -0.2% -0.6% -0.1% +0.4% Source: Statistics Canada, CANSIM Table 282-0002 Unemployment Rate for Selected Geographies (2008 to 2017) Geography 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Canada 6.1% 8.3% 8.1% 7.5% 7.3% 7.1% 6.9% 6.9% 7.0% 6.3% Atl. Canada 9.3% 10.5% 10.7% 10.1% 10.3% 10.2% 10.0% 10.0% 10.0% 9.7% NB 8.5% 8.7% 9.2% 9.5% 10.2% 10.3% 9.9% 9.8% 9.5% 8.1% Source: Statistics Canada, CANSIM Table 282-0002 5 GDP is the total value of goods and services in the economy. Increases and decreases over time indicate expansion and contraction of the economy. Real GDP adjusts for inflation. Page 11 of 11