Too Much Minimum Thought About The Minimum Wage
It would probably be a good idea to stay indoors this weekend. Civilization as we know it is about to come to a screeching halt. Unemployment is going to skyrocket, businesses are going to shut down in record numbers and basically the Canadian economy will implode leaving us all in penury.
And all because the Ontario government is raising the minimum wage by $.75 / hr.
I’ve read more pundit commentary, Facebook comments and posts and blog articles about this unprecedented disaster than I can count. Certainly it was far more than written about the alarming level of suicides by our veterans and military, Justin Trudeau’s announcement removing Liberal Senators from his caucus and the weather.
You’ve got to believe that’s a lot of chatter if it outranks how much people talk about the weather. Weather is a constant topic among Canadians.
I don’t disagree that a minimum wage that is too high can and probably would have a detrimental effect on business but are we really looking at an increase that is such a threat?
Consider the basic facts.
First, as a society we have agreed that there is a need for a minimum wage. Left to its own devices, business has too often proven that it will take advantage of anything and anyone in its quest for profits. That’s not a criticism, just an observation but it has led to government regulations on occupational health and safety, laws to prevent discriminatory hiring practices, maximum hours, minimum age and, of course, a minimum basic wage.
There hasn’t been much moaning and groaning about any of that; in fact, most people seem to agree that it is necessary to provide a safe and fair work environment.
Accordingly, Ontario has a minimum wage which it froze in 2010 at $10.25 / hr. It is now 2014 which means that the real value of that minimum wage has been reduced by inflation. Gas prices have increased along with food, mass transit fares, hydro rates and taxes but the minimum wage has remained static.
In other words, in terms of real dollars, people on minimum wage are earning less today than they did four years ago when we didn’t mind a minimum wage at $10.25/hr.
It’s true that employment is a serious issue facing this country but it is equally true that it has little to do with the minimum wage. Since 2006, there has been a paltry net increase of less than 150,000 new jobs in Canada and no increase in the minimum wage for years. Clearly other factors have a far more significant impact on employment including exorbitant hydro rates, the high cost of transportation and wages but not the minimum wage – union negotiated wages and benefits have priced too many jobs right out of the country.
And it isn’t just the branch operations of foreign-owned companies that have sent their jobs elsewhere. Canadian companies like Bell Canada have moved their call centres as far away as India and many manufacturing and technology jobs have been relocated out of the country where salaries and benefits are lower.
Others have suggested that it will lead to a reduction in minimum wage jobs and point to stats and figures to prove their point It may in the short term but not the longer term. The simple reality is that business didn’t hire those people out of some sense of altruism, it hired them because they were needed and raising the minimum wage by $.75/hr isn’t going to change that. The reality is that minimum jobs have consistently increased over the past decade.
In the end it really just comes down to this.
An increase of $0.75/hr amounts to a mere $0.19/hr each year since 2010. I believe the only mistake the Ontario government made was in making the increase retroactive to 2010. It’s just one more example of how to take what is basically a good idea and screw it up. Politicians seem quite adroit when it comes to that. It isn’t the increase in minimum wage that will cause difficulty for Ontario business, it’s having to track down all former employees since 2010 to give them retroactive pay increases. What a ridiculous imposition that is on a business.
None of this will stop the hyperbole, however. because most of the reaction to the government announcement is about stereotyping the working poor. The stereotypes and predictions rain down on us like a torrential downpour.
All people earning minimum wage are: ‘stupid’, ‘lazy’, ‘uneducated’ and/or ‘unmotivated.’ The fact that slightly more than half are young people still living with their parents because they can’t find meaningful work to support themselves matters not to those who are married to their simple-minded illusions about the working poor. Many on minimum wage are working to pay their way through college or university and working while going to school seems pretty motivated to me. So does holding down more than one minimum wage job to provide for yourself and your family in the absence of a better paying job thanks to the complete mess governments and the high finance flyers have made of our economies.
The other thing I don’t get is the suggestion that instead of a modest increase in the minimum wage to keep abreast with the rising cost of living; government (meaning you and I) should simply pay people a guaranteed minimum income whether they are working or not.
That was discussed in some detail recently in a National Post column written by Andrew Coyne.
Think about that for a moment. Raising the minimum wage for those who are working at the bottom of the income scale will devastate employment but paying a guaranteed income won’t. Is it simply because business won’t have to pay the guaranteed income (that would be left to taxpayers)? I don’t think so. I think it is just one more example of a knee-jerk reaction based on theories that don’t have much actual fact or even thinking behind them.
No society can prosper if it pays people more to do nothing than those who are willing to work and try to earn their own way.
Demonizing those people serves even less useful purpose. It simply underscores just how little thinking we are willing to invest in serious issues these days and illustrates once again just how parsimonious and mean-spirited we can be – when it isn’t our lifestyle under attack.
We’re Canadians and there was a time when whether we were conservative, liberal or otherwise – we were better than that.
© 2013 Maggie’s Bear
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