Will a higher minimum wage decrease poverty in New Brunswick?

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New Brunswick Institute for Research, Data and Training


What is the best way to reduce poverty in New Brunswick? In recent years, there have been increasing public debates across Canada about the need to implement new policy levers to tackle the problem of poverty. These have largely taken the form of advocacy for accelerated minimum wage increases – specifically to $15 an hour. With the provinces of Alberta, Ontario, and British Columbia raising (or promising to raise) the minimum wage to $15/hour in 2018, 2019, and 2021, respectively, other Canadian provinces have debated whether they should follow suit. In Fredericton, New Brunswick, a media movement called “Fight for 15 Fredericton” is emulating the original “Fight for 15” initiated by New York City fast-food workers in 2012 – and is hoping to meet with the same success. However, it is important to gather evidence predicting the impact such an increase in minimum wage would have for New Brunswick. Would an increase similar to those in Ontario, Alberta, and British Columbia produce positive or negative results for the region? What outcomes would this kind of increase have on the rate and depth of poverty in New Brunswick? And would a different policy prove more effective? This report, produced by the New Brunswick Institute for Research, Data and Training, reviews the evidence surrounding minimum wage increases, living wage policies, taxes and transfers, and Universal Guaranteed Basic Income policies to assess how these instruments might impact poverty levels in New Brunswick. The authors find that a higher minimum wage is unlikely to significantly reduce poverty, whereas an income-based prorated Universal Guaranteed Basic Income might be the most far-reaching effective poverty reduction strategy – especially when implemented alongside current tax and transfer policies.