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Raising the Minimum Wage: An upstream policy to help promote health and wellbeing

The Ontario government has set up an Advisory Panel to recommend approaches for determining future increases to the minimum wage.  The Panel will report back to government in January 2014.

Submission from the Association of Ontario Health Centres to the Advisory Panel on the Minimum Wage -October 2013


The Association of Ontario Health Centres (AOHC) is the voice of community-governed primary health care in Ontario. We are pleased to provide input to the Advisory Panel on the Minimum Wage which will be making recommendations to the Ontario government on approaches for determining future adjustments to the minimum wage.

AOHC’s vision is the best possible health and wellbeing for everyone living in Ontario. We know that reducing and eradicating poverty is essential to achieve this vision.  A strong minimum wage policy which ensures that people working full time at minimum wage do not live in poverty is imperative tomove toward the goal of a poverty free Ontario.

Minimum Wage Facts

  • Full time work at Ontario’s minimum wage $10.25/hour earns a single person $18,655 before taxes.[1]
  • Under Ontario’s measure of poverty, the Low Income Measure, a person is considered living in poverty with an annual income before taxes of less than $23,105.
  • The latest data indicates that 9% of Ontario employees earned minimum wage in 2011. [2] This number has increased from 4.3% in 2003.
  • Almost 40% of employees earning minimum wage were aged 25 and older.
  • Women, racialized workers, and recent immigrants are more likely to be working at minimum wage.
  • Almost one million employees in Ontario are in low wage work earning between $10.25-$14.25/hour.

AOHC members include 123 community-governed primary health care providers across the province: Community Health Centres (CHC), Aboriginal Health Access Centres (AHAC), Community Family Health Teams (CFHT), and Nurse Practitioner-led Clinics (NPLC). They have a special mandate to serve people with barriers accessing health services, including low income people, Aboriginal People, people with disabilities, newcomers, people who are LGBT, Francophones and people in rural or remote communities.

Many reports have documented the fact that low income people are at higher risk of poor health.  The Canadian Medical Association concludes in a recent report that the biggest barrier to good health is poverty. [3] The 2012 Drummond Commission report noted that more than 50% of population health outcomes are determined by socio-economic factors such as income, working conditions and education. [4]

More specifically, research has found that people whose incomes are below the poverty line experience increased rates of chronic illnesses such as diabetes, heart disease, migraines and bronchitis, compared to people with decent incomes. [5] A recent report from the Wellesley Institute, Rising Inequality, Declining Health, notes a widening gap between the health of the working poor and those whose work provides sufficient income.  It concludes that worsening labour market conditions, a weakened social safety net in Ontario, and increasing income inequality are accompanied by growing inequities in health. [6]

Poverty and income inequality lead to higher health care costs. A recent report from the Health Council of Canada refers to the finding that an estimated 20% of the $200 billion spend on health care annually in Canada can be attributed to income disparities. A Saskatoon study found that low –income residents consume 35% more health care resources than middle and high-income residents. If these residents earned enough to move into the middle income bracket they would save $179million in health care expenditures. [7]  Clearly  raising the minimum wage and other policies that increase the incomes of low income people would lead both to improved health outcomes and  savings to the health care system.

The feedback we receive from Community Health Centres and Aboriginal Health Access Centres confirms the findings of these studies. Many of the people served by AOHC member Centres are living on low incomes, either from social assistance, low wage work or pensions. Our members see firsthand how low wages affect the physical health, mental health and overall wellbeing of people. They also see how lack of access to nutritious food because of low wages and social assistance rates contributes to poor health. Low wage and precarious work does not usually provide workers with drug, dental and vision benefits. [8]  Health providers in our member Centres know the impact on people’s health and wellbeing when they cannot afford their prescription medication and dental care.

Community Health Centres and Aboriginal Health Access Centres are the only primary health care providers in Ontario which focus on the social determinants of health. Our members  provide both primary health care services and a wide range of health promotion and community development services. Examples include: Pathways to Education, pre and post-natal nutrition programs, community gardens and community kitchens, and programs that support improved employment and housing.

Our work has taught us that governments need to move to an upstream approach and make strategic policy decisions that will improve health and wellbeing today to prevent spending on sickness care and rehabilitation in the future. Increasing Ontario’s minimum wage on an annual basis to ensure that minimum wage workers are not living in poverty represents an example of an upstream approach to address the social determinants of health.

Recommendations:

The Association of Ontario Health Centres believes that all Ontarians deserve secure and livable incomes that enable them to live in dignity with good health and wellbeing. Paid employment in Ontario should ensure that people are not living in poverty.                                                         

We offer the following recommendations to the Advisory Panel on the Minimum Wage:

  • As an anti-poverty measure the minimum wage is an integral element of Ontario’s Poverty Reduction Strategy.   It should be set at a level which ensures that paid work is an effective pathway out of poverty. Ontario’s Poverty Reduction Strategy uses the Low Income Measure (LIM).  Ontario’s minimum wage should be set so that earnings from full-time, full-year work at the minimum wage provide a level of income above the LIM for a single adult.
  •  In reviewing and setting the minimum wage, the Ontario government should consider the impact of minimum wage increases on the rate and depth of poverty.
  • It should consider the extent to which the minimum wage has a “trickle up” impact and
  • helps to raise the level of earnings in low wage sectors.
  • Ontario should establish a process to set the minimum wage which takes decisions out of the political arena.
  • Ontario’s minimum wage should be adjusted annually to at least keep pace with changes in the Consumer Price Index. This follows the lead of other provinces and territories including Nova Scotia, Yukon, and Alberta.
  • Every two or three years, the minimum wage should be adjusted to a level which ensures that full-time minimum wage work provides an income above the Low Income Measure.

 


Contact:

Jacquie Maund, Policy and Government Relations Lead

Association of Ontario Health Centres (AOHC)

Tel: 416.236.2539 x 234    

Email: jacquie@aohc.org


Sources and Notes:

[1] LIM is 50% of median income. The figure is established annually with a 2 year time lag. In 2013

the LIN is $23,105 based on Before Tax Low Income Measure for 1 person household calculated from the 2010 LIM, plus 2% annual adjustment for CPI.

[2]  http://www.wellesleyinstitute.com/publication/who-is-working-for-minimum-wage-in-ontario/

[3] http://www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Advocacy/HCT/What-makes- us-sick_en.pdf

[4]http://www.fin.gov.on.ca/en/reformcommission/

[5] http://www.socialplanningtoronto.org/reports/sick-and-tired-report-released/

[6] http://www.wellesleyinstitute.com/publication/rising-inequality-declining-health/

[7] http://www.healthcouncilcanada.ca/rpt_det.php?id=162  p.7

[8]Lewchuk, Wayne et al. Working without Commitments: The Health Effects of Precarious Employment. 2011

Thursday, October 17, 2013
health