Minimum Wage Is Not The Answer

There is no question that raising the minimum wage to $10 would drive up the costs of many services and products, and probably raise taxes on the "middle class", and while many would argue that this should not be considered as a reason to not make the adjustment my argument would be that your labour is a commodity and like everything else in the marketplace the value of your labour is tied to the value what you have to offer. I would present this proposal to The Star......lower the cost of your newspaper so poor people can afford it, offer lower advertising rates to those firms that support your position, acede to any proposals put forward when dealing with unions, etc. etc. Show us the way.

Editorial: Poverty no way to preserve jobs
Oct. 19, 2006. 01:00 AM

Does Finance Minister Greg Sorbara really believe it is necessary for the government to push Ontario's lowest-paid workers even deeper into poverty in order to protect their jobs? Surely not, but for all intents and purposes that is the position he has taken in rejecting a private member's bill to raise Ontario's minimum wage to $10 an hour.

Claiming small businesses in the province could not afford it, Sorbara said a $10 minimum wage would kill jobs and increase poverty. "Those who were earning a lower minimum wage would have no wage at all," he warned after New Democrat MPP Cheri Di Nova introduced the bill. Joining him in that view was Progressive Conservative Leader John Tory, who says a $2 hike would be "very substantial" for companies to absorb.

In taking that stance, both Sorbara and Tory are effectively telling the lowest-paid workers in this province that they do not deserve to be paid a decent wage for their labour. In effect, they are arguing that the living standards of our poorest workers must continue to suffer for them to be able to hold on to their jobs.

Minimum-wage workers in Ontario have been fighting a losing battle to raise their incomes ever since 1995 when the former Conservative government under premier Mike Harris froze their salaries at $6.85 an hour. Over the next eight years, Ontarians earning the minimum saw the cost of living increase by almost 20 per cent, although their wage remained at $6.85 an hour over that period. Accordingly, the real buying power of the minimum wage dropped by more than 15 per cent over that time.

When they came to power in 2003, the Liberals lifted the freeze, but only raised the wage generally in line with inflation. It is now $7.75 an hour.

To make up for that loss in real earnings between 1995 and 2003, Ontario's minimum wage would have had to rise to $8.10 by 2003. And given the pace of inflation since then, it would have to rise to $8.90 next year just to make up for the loss to inflation the lowest earners will have felt by then.

As a result, the $8 minimum wage that the Liberal government is proposing to bring in next February will still leave Ontario's most vulnerable workers 10 per cent worse off than they were more than a decade ago.

This is unacceptable in a province as rich as Ontario.

In fact, there is no reason why those at the very bottom of the earning ladder should not share to some extent in the real income growth that has occurred in Ontario since 1995. Real per capita income in Ontario increased by about 21 per cent in the decade since 1995. If minimum-wage workers had shared in just half of that growth, they would be earning $10 an hour today, which is where the minimum wage now should be set.

But would that kill jobs as Sorbara claims?

Most Ontarians working at minimum wage are employed in the service sector, such as cleaning hotel rooms or washing dishes. There is far less risk of job loss to competition from low-wage countries than there is in manufacturing. Thus, the alleged threat to job loss is not really a factor for most minimum-wage jobs. Moreover, in an economy where 93 per cent of workers make more than $10 an hour, and only 1.2 per cent of the workforce currently make minimum wage, it is difficult to imagine that the move to $10 would have a big effect on overall business costs.

But what a higher wage would do is make life a little bit easier for many Ontarians who have been exploited by a law that purports ironically to protect them by keeping them desperately poor.

Sorbara and Tory should stop paying lip service to this excuse for inaction and provide Ontario's lowest-paid workers with some real protection against poverty in the form of a $10-an-hour minimum wage.