Making the minimum wage a living wage


marygaspe
#1


In the end, if a business can't afford to pay its employees a living wage it shouldn't be in business — paying anything less is exploitation.

>by John Jacobs


After years of pressure from anti-poverty advocates it seems that politicians and the media across the country have taken a renewed interest in the minimum wage. A number of provinces are in the midst of minimum wage discussions. Internationally the minimum wage has also been in the headlines. In Europe significant increases are being implemented and the U.S. Congress has recently passed minimum wage legislation to provide the first increase in almost 10 years.
In Canada, Harry Arthurs, the federal Commissioner appointed to review labour standards, got the ball rolling. In his report last fall entitled “Fairness at Work” (external - login to view) Arthurs concluded that in setting the minimum wage “the government should accept the principle that no Canadian worker should work full-time for a year and still live in poverty.”
The commissioner's report to the federal government finally brought some official recognition of what anti-poverty activists have been pushing for years — the minimum wage must become a living wage.
The minimum wage is an increasingly important means of addressing poverty. In the absence of social programs such as affordable housing and child care, low-income earners are left to rely on the minimum wage to try and make ends meet. Without significant funding for post-secondary education, tuition fees continue to escalate and students increasingly depend on the minimum wage jobs to try and cover their costs.
Increasing the minimum wage benefits all of the working poor, not just those working for the minimum wage. The minimum wage is the benchmark wage or the reference point for both employers and employees in the setting and negotiating of wages. Increasing the minimum wage puts upward pressure on other wages, especially low wages; if it remains low, these wages will stagnate.
The Nova Scotian economy has been producing a disproportionate number of low wage jobs. Boosting the minimum wage can reverse this trend by encouraging businesses to invest in equipment and training rather than rely on low wages to remain profitable.
While there is considerable consensus that the minimum wage should increase, how high the rate should be set is much more contentious.
In Nova Scotia the rate is currently set by the labour minister based on the recommendations of the provincial minimum wage review committee, which is made up of two members from the business sector and two from labour. In December the committee recommended an increase of more the six per cent from $7.15 to $.7.60 to take place in April. The recommended increase is well above inflation and a good start.
The increase has support from some unexpected quarters. The vice-president of the Halifax Chamber of Commerce supports the increase stating, “We know that there is an impact on our members … That said, we are certainly in a war to keep talent here in Nova Scotia, and the ability to offer a competitive salary is one of the weapons we have.”
It appears that the workers leaving Nova Scotia to feed the economic boom in Alberta are having an unintended consequence — forcing businesses in Nova Scotia to increase wages.
The biggest shortcoming of the provincial advisory committee's recommendations is that it does not explicitly recommend a specific method for setting the minimum wage.
Federal commissioner Arthurs recommended that over a “phase-in period … the federal minimum wage should be raised until it meets the low-income cut-off (LICO) index.” Pegging the minimum wage to the LICO (external - login to view), Statistics Canada's measure of low income, concurs with what many anti-poverty activists have been recommending.
But does the Nova Scotia advisory committee agree that the target should be a rate that enables a worker to get out of poverty? And if so what should be the timeline for reaching the target? On these issues the committee was apparently unable to reach a consensus.
The committee does acknowledge the LICO as a possible target for setting the minimum wage. Using the low income formula discussed in the committee's report, the Nova Scotian rate for 2007 should be in the $9-an-hour range some anti-poverty advocates are pushing for. With an annual 6.3 per cent increase, such as proposed for 2007, it would take at least five years for the minimum wage in Nova Scotia to become a living wage.
We need to move faster. This is not new terrain; we've been here before. In the 1970s workers earning the minimum wage received a rate that was roughly equivalent to $9 an hour today. Thirty years later the Canadian economy is producing much higher levels of wealth and profit, but paying its most vulnerable workers less.
Perhaps, as recommended by the committee, small businesses in the low-wage sectors should receive government support in making the transition to paying a living wage. But we should not be subsidizing very profitable trans-national corporations such as McDonalds and Tim Hortons. In general, I think consumers would be willing to pay a few cents more for their coffee if they knew it was going into the pockets of the workers who most need it.
Here's the bottom line from my perspective. In the end, if a business can't afford to pay its employees a living wage it shouldn't be in business — paying anything less is exploitation.
John Jacobs is director of the Nova Scotia office of the Canadian Centre for Policy Alternatives (external - login to view), an independent public policy research institute. A version of this commentary was originally published in The Chronicle Herald.
 
canadarocks
#2
Good article. I agree with its author. Current minimum wage rates, at least in ON, cannot even begin to sustain the average family. Why do we punish a whole segment of the population who are willing to work hard because they lack University degrees?
 
CDNBear
#3
Quote: Originally Posted by marygaspeView Post



In the end, if a business can't afford to pay its employees a living wage it shouldn't be in business — paying anything less is exploitation.

This is a tough one for me. I agree and dissagree.

When I started up, I could'nt afford to pay anyone, I did it all myself. I made a bit of cash, got a few more jobs, hired a guy to help and paid him $10 an hour. That was all I could afford. I realize that is above minimum wage. But what if I needed the help to finish a contract and get bigger so I could pay more, but could not afford to pay more then minimum wage at the time? Should that negate my chances, my right to try?

But paying well has its benefits...

Pay the minimum, get little to no loyalty, risk high turn over, high training costs, theft and so on.

Pay well, gets loyalty, keeps associates content, low risk of theft, lower turn over.

Starting a small busines isn't easy, getting it to survive is even harder. Forcing small businesses that are on the ground floor to dish out higher wages, is likely going to kill them before they can grow enough to survive and pay hire wages. Not that the greedy share in their profits. But I'm not greedy.
 
darkbeaver
#4
Small bussiness is helped by GAI gaureenteed anual incomes, in that it makes available money at the base where it feeds small service and retail ventures, that is where the best bang for the buck occurs,
if the people have money for necessitys the baker the butcher and the candlestick maker all get in on the economy. If an economy has a strong base it'll function for all. If it concentrates at the top it just does not circulate as well. That's what beavers think anyway.
 
CDNBear
#5
Quote: Originally Posted by darkbeaverView Post

Small bussiness is helped by GAI gaureenteed anual incomes, in that it makes available money at the base where it feeds small service and retail ventures, that is where the best bang for the buck occurs,
if the people have money for necessitys the baker the butcher and the candlestick maker all get in on the economy. If an economy has a strong base it'll function for all. If it concentrates at the top it just does not circulate as well. That's what beavers think anyway.

You would be correct about the system being top heavy, but in the interim between increasing the minimum wage and the effects of that increase on the small business man to be positive, many new small businesses wil be driven to ruin. There realy is very limited support for the small business people of Canada, the deck is already stacked agianst us. This will only serve to stifle them and allow big business keep a strangle hold on the market.
 
AmberEyes
#6
I don't know much about economics, but I do know what it's like to be living off minimum wage.

Currently I'm in school upgrading my ABE, hoping to get into the sciences program next year at University. After that, it's off to UBC for a degree in pharmacy or chemistry, we'll see when the time comes. Even though I'm at school, and even though my courses are paid for by the government, my living costs are NOT paid for, and I'm at school 4 days a week, full time. That gives me three days to work at minimum wage. And because of the public transit, I can't even work FULL days, so I'm making about $450 a month.... and I have to live off that. The minimum wage here in BC is currently $8.00, and while a single person working full time would be able to support themselves on that wage, a working mother of three kids cannot. The cost of living is rising considerably in some parts of the country, especially in the Vancouver area, and it's becoming increasingly hard to find affordable, low-income housing.
 
darkbeaver
#7
Quote: Originally Posted by CDNBearView Post

You would be correct about the system being top heavy, but in the interim between increasing the minimum wage and the effects of that increase on the small business man to be positive, many new small businesses wil be driven to ruin. There realy is very limited support for the small business people of Canada, the deck is already stacked agianst us. This will only serve to stifle them and allow big business keep a strangle hold on the market.

Small bussiness has always been the backbone of community, the biggest enemy of community in general are the transnationals and thier supporters who centralize and concentrate rather than expand. All the lip service that's been paid to the small bussiness core has been just that small bissiness will never be helped by those who serve multinationals or elitism. I would vote for tax incentives and help of all kinds to support the small bussiness person, this would build employment at the grass roots community and regional levels where it serves the economy best. Small bussiness will never get a break from the rich, it just dosn't work that way. Take care of your community and it will take care of you.
 
CDNBear
#8
Quote: Originally Posted by darkbeaverView Post

Small bussiness has always been the backbone of community, the biggest enemy of community in general are the transnationals and thier supporters who centralize and concentrate rather than expand. All the lip service that's been paid to the small bussiness core has been just that small bissiness will never be helped by those who serve multinationals or elitism. I would vote for tax incentives and help of all kinds to support the small bussiness person, this would build employment at the grass roots community and regional levels where it serves the economy best. Small bussiness will never get a break from the rich, it just dosn't work that way. Take care of your community and it will take care of you.

Dear gawd man, you speak reason and intelligence!!! You have absolutely no chance as a politician!!!
 
eh1eh
#9
I don't know what this complianing is about. People who make minimum wage can just shop at Walmart. Price Cut! If you aren't willing to pay for something, ie. shopping at Walmart to save 88 cents, than how can you expect the people to make more when you only want to spend less. It's a paradox.
 
Tonington
#10
Well, I know as a student the minimum wage is s h i t. I haven't worked for minimum wage in a long time, this past summer I had a research job that paid me the going rate for NSRC grants, which worked out to roughly $8.50/hour. My debt is sky rocketing every year, I need a line of credit to offset costs that can't be covered by my student loans. So this summer I'm going to live with my father in Alberta. One of his friends told my father his company pays around $18/hour to install insulation, some kind of styrofoam blocks. I guess I should have no problem finding work according to Dad and his friends, hell maybe I can pay off a huge chunk of my line of credit...
 
eh1eh
#11
Quote: Originally Posted by ToningtonView Post

Well, I know as a student the minimum wage is s h i t. I haven't worked for minimum wage in a long time, this past summer I had a research job that paid me the going rate for NSRC grants, which worked out to roughly $8.50/hour. My debt is sky rocketing every year, I need a line of credit to offset costs that can't be covered by my student loans. So this summer I'm going to live with my father in Alberta. One of his friends told my father his company pays around $18/hour to install insulation, some kind of styrofoam blocks. I guess I should have no problem finding work according to Dad and his friends, hell maybe I can pay off a huge chunk of my line of credit...

Guess your degree in 'Foam Blockea' will come in real handy. At least for your loans.
 
Tonington
#12
Lol, yah hopefully. I really don't care what the job is. I just want to work hard and make some cash. I only get to see my Dad every other Christmas, so I'll get to spend the summer with him, go canoeing, amonite hunting and visit the rest of my familly out that way.
 
eh1eh
#13
Quote: Originally Posted by ToningtonView Post

Lol, yah hopefully. I really don't care what the job is. I just want to work hard and make some cash. I only get to see my Dad every other Christmas, so I'll get to spend the summer with him, go canoeing, amonite hunting and visit the rest of my familly out that way.

A homecommimg of sorts. What are you doing in school? Will you be able to work where you want?
 
Tonington
#14
My degree is in Agricultural science, major is Aquaculture. Ahh, that reminds me I can go fishing lots out there too.
 
eh1eh
#15
Quote: Originally Posted by ToningtonView Post

My degree is in Agricultural science, major is Aquaculture. Ahh, that reminds me I can go fishing lots out there too.

That leaves things pretty open. Around the world may be in your cards.
 
Tonington
#16
I'm actually planning on going to the Armed forces after I graduate. Preferably RCAF. I think having some fish ponds would be good for retirement.
 
eh1eh
#17
Quote: Originally Posted by ToningtonView Post

I'm actually planning on going to the Armed forces after I graduate. Preferably RCAF. I think having some fish ponds would be good for retirement.

So what your saying is it will all pay off when your 65. LOl
 
marygaspe
#18
Quote: Originally Posted by eh1ehView Post

I don't know what this complianing is about. People who make minimum wage can just shop at Walmart. Price Cut! If you aren't willing to pay for something, ie. shopping at Walmart to save 88 cents, than how can you expect the people to make more when you only want to spend less. It's a paradox.


Really! Do you think it is a good pratice to value employees with low wages? Don't you think these people budget already? Look at the success of chains like Value Village! But what do you do if you have a few kids, no mate, and you make around 8$ an hour, rent is well over 6-700..I mean, we have to understand that people deserve to be paid fairly for the work they do.
 
Sparrow
#19
I agree that starting a small business will not be easy. When a big industries starts a new business in a city they are usually given something like 5 yrs. no taxes, but I don't know if small businesses get the same, I would be surprised. This should be extended to all taxes. Small business, as you say, are the backbone of the community but they are not being treated as such. Minimum wages need to increase because as it is some poeple are better off on social welfare. However we can be sure that if the government decides to increase the wages they will not look at all the ramifications of their decision on small businesses. Maybe it is too much to ask!
 
eh1eh
#20
Quote: Originally Posted by marygaspeView Post

Really! Do you think it is a good pratice to value employees with low wages? Don't you think these people budget already? Look at the success of chains like Value Village! But what do you do if you have a few kids, no mate, and you make around 8$ an hour, rent is well over 6-700..I mean, we have to understand that people deserve to be paid fairly for the work they do.

Yes I get it Mary. That is the paradox I refer to. The lower the wages, the less poeple can pay for things, so employers must lower the wages so they can sell cheaper... on and on it goes.
 
L Gilbert
#21
Quote: Originally Posted by darkbeaverView Post

Small bussiness has always been the backbone of community, the biggest enemy of community in general are the transnationals and thier supporters who centralize and concentrate rather than expand. All the lip service that's been paid to the small bussiness core has been just that small bissiness will never be helped by those who serve multinationals or elitism. I would vote for tax incentives and help of all kinds to support the small bussiness person, this would build employment at the grass roots community and regional levels where it serves the economy best. Small bussiness will never get a break from the rich, it just dosn't work that way. Take care of your community and it will take care of you.

Yup. Unfortunately, small business cannot afford to offer products at the same prices as the States' Walmart, Kmart, etc. and Canada's Zeller's, GCWCs, etc. There is no way small business can compete with those large chains in many areas of business.
Here on Nelson, for instance, the City has made parking in town ridiculously difficult (it doesn't help when they plow snow into the parking spaces either), they still allow left hand turns off and onto the downtown core streets so people have to wait a full light to move ahead one carlength; but that's where the bulk of the small businesses are. Down by the lake is the mall where there's tons of parking, Walmart, a supermarket, a half dozen small chain type stores, and nearby is one of those club type stores that carries a huge variety of stuff at bulk prices. Guess where most people shop?
Bear is dead right, the deck is stacked against small biz.
 
L Gilbert
#22
Quote: Originally Posted by eh1ehView Post

That leaves things pretty open. Around the world may be in your cards.

Or at least around the country. BC still needs major help with getting farms to operate conscientiously and resposibly.
 
L Gilbert
#23
Quote: Originally Posted by ToningtonView Post

I'm actually planning on going to the Armed forces after I graduate. Preferably RCAF. I think having some fish ponds would be good for retirement.

Pick your area carefully. For instance, I have a friend here who had about 4 or 5 ponds and he was constantly being raided by, herons, ospreys, eagles, etc. I think he's down to 2 ponds now or has maybe quit altogether. He's into small mining projects now.
 
Tonington
#24
Mmm, site selection is everything, unfortuantely most people don't consider all those variables before they start. You can put nets up over the pond, but they always seem to find a way.
 
L Gilbert
#25
Quote: Originally Posted by marygaspeView Post

Really! Do you think it is a good pratice to value employees with low wages? Don't you think these people budget already? Look at the success of chains like Value Village! But what do you do if you have a few kids, no mate, and you make around 8$ an hour, rent is well over 6-700..I mean, we have to understand that people deserve to be paid fairly for the work they do.

Small business can only pay so much or else they go under, too, though. Like perhaps a small biz can only afford to pay minwage because if it paid more, it would have to cut back somewhere else, perhaps in quality of product or variety of products, lay off an employee, or something.
 

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