Sunday, 13 August 2017

To a $15 Minimum Wage and Beyond

By most measures, things are poised to improve for many Canadian workers. The province of Alberta plans to implement a $15.00 minimum next year and Ontario, via Bill 148, which is currently being considered by the Standing Committee on Finance and Economic Affairs, intends to increase the minimum wage first to $14.00 in 2018 and then to $15.00 in 2019.

Good news, right? Well, it depends on who you ask. While most Canadians approve of the intended wage increases, a good portion of the country oppose the hikes.

The strongest opposition comes from those who are least in need of an increase, and who will probably never know the hardship faced by those working for the minimum wage. That’s right, the prospect of a higher minimum wage is opposed by the wealthiest among us.

Curiously, according to a Forum Research Poll, this is a point where the wealthy and the youth find common ground – they each have misgivings about the minimum wage increase. The Poll found that 36% of those earning at least $100k per year oppose the increase, while the youth oppose it at a rate of 35%. Forty-one percent of those with children also oppose the increase.

So how to explain the apparent agreement between the youth and the wealthy? For the wealthy, particularly the business owners, the opposition is likely borne of a desire to keep labour costs down. Labour costs are often among the highest costs faced by a business, and owners have a long history of advocating against paying their workers are living wage, often warning that an increase in labour costs will force them to pursue more automation to reduce their labour force(s). Of course this ignores the theory that if workers earn more they’ll spend more, often profiting the very businesses that resist the wage increases.

With the youth, one theory is that their resistance to a higher minimum wage is a response to fears, stoked by the business community, of increased automation and a labour reduction. And with the naysayers to the proposed increases strongly voicing their opposition, it’s only natural to have concerns. The Canadian Federation of Independent Business (CFIB), for instance, is campaigning against the increase, saying that “A high minimum wage will reduce employment through “hiring freezes, slower employment growth, or direct job cuts during an economic downturn.”

What is a youth who hears such statements expected to feel other than concern for their job prospects? The CFIB has also argued that “most minimum wage earners are young, live with family members, and are not from low-income households.”

But the CFIB should not be taken as infallible on either point. A study by the Canadian Centre for Policy Alternatives has a different view, finding that, in British Columbia, 82% of minimum wage workers are 20 years old or older. The study also found that the sky will not fall if the wage increases to $15.00.

But quibbling over who is or is not a minimum wage worker clouds the true issue, which is that full-time minimum wage workers in Canada are often forced to live in poverty.  In a wealthy country, that’s simply unacceptable.

Other G8 countries have established minimum wages close to or even above $15.00 and have done so without the economic collapse predicted by the doom and gloom sector. In France, for example, the minimum wage is 9.76 Euro ($14.63 in Canadian dollars), while in Germany, the economic powerhouse of the EU, the minimum wage is 8.84 Euro ($13.25 in Canadian dollars). In Australia, the minimum wage is presently 18.29 AUD ($18.30 in Canadian dollars). Not only are these rates higher than the highest minimum wage currently offered in Canada ($13.00 in Nunavut), the citizens are often less burdened by the types of secondary costs that overwhelm many Canadians, such as tuition fees and the costs of daycare services.

If nothing else, it seems safe to conclude that the economy will not collapse when the minimum wage rises to $15.00. Youth who worry over the prospect of diminished job opportunities should take some comfort in the fact that the CCPA study found that if the minimum wage were increased to $15.00 in BC, any reduction in employment would be modest (i.e. less than 1%).

As for a business community that cries poor whenever the prospect is raised of paying a minimum wage that even approximates a living wage, well, we can only remind it of the words of U.S. President Roosevelt when he criticized businesses for paying low wages: "No business which depends for existence on paying less than living wages to its   workers has any right to continue in this country."

In Ontario, the minimum wage has been far too low for far too long, and presently stands at $11.40 per hour. In practical terms, this means that even with two people working full-time at minimum wage, it would be near impossible to live and work in a city like Toronto. Rent would eat up almost all of the income and keep the wage-earners trapped in a cycle of poverty.  This is unacceptable. People in Ontario simply cannot live with the dignity they deserve whilst receiving a wage that keeps them in a cycle of poverty. At the very least, the workers of Ontario, and indeed workers everywhere, deserve to be recognized and appreciated for the work they do. They deserve a path out of poverty. The first step on this path is a $15.00 minimum wage.