September 27, 2013
Labour Council Op-Ed: Ontario’s Minimum Wage Frozen Too Long
On Friday, September 27, 2013, the Toronto Star published the following op-ed by Toronto & York Region Labour Council President John Cartwright and Vice-President Andria Babbington. The article addresses Ontario’s stagnant minimum wage and the need to raise it to $14.
“A job should lift you out of poverty, not keep you in it.”
Not many years ago, that statement would have seemed unnecessary to most Canadians. But in today’s economy, the assertion that people working a full-time job should not be in poverty is not so obvious. In fact, it is met with derision by many business lobbyists and pro-business pundits. The statement is at the core of the challenge facing the Ontario government — does it believe that poverty will be addressed without fundamentally addressing the issue of poverty wages?
Minimum wages have been frozen in Ontario for three years. In the meantime, profits of the major banks have not only recovered but exceeded all expectations; the income levels of CEOs have soared while many more Ontarians have been stuck in low-wage jobs and students are working far more hours in multiple jobs to help pay for university tuition. Corporate privilege seems to count far more than the rights of people or communities.
It is true that by itself raising the minimum wage does not solve the crisis of poverty or income disparity. But everyone who works in low-wage sectors like retail or food service says very clearly that going from the $10.25 or $11 an hour they currently make up to $14 would make a huge difference in their lives.
The issue is low wages. The obstacle — the very powerful companies in our society that no longer reward work with a living wage. This is not just about fast-food franchises. People are working in non-union factories and warehouses through temp agencies for just barely over minimum wage. Workers of colour have been particularly hard hit, and the parallel growing racialization of poverty cannot be denied.
The government-appointed minimum wage advisory panel’s consultation paper asks a number of questions about factors that should be considered in determining the minimum wage. The Labour Council’s position is straightforward but not simplistic — nobody working a full-time job in Ontario should be in poverty. We believe this could be achieved by raising the minimum wage to $14 per hour, and then indexing it to inflation. This figure represents what is needed to keep someone above the low-income cut-off.
It is important to recognize two key elements in this analysis. The first is that both inflation and the rise in productivity should be taken into account when considering wage increases. There are very few jobs that have not been made dramatically more productive by technological change in recent decades. The resulting wealth creation should be fairly shared by both employers and employees. In unionized workplaces, this is traditionally achieved through collective bargaining. But in the low-wage service sector, it happens only when the minimum wage is increased.
The second point is that most low-wage workers in Ontario are employed by wealthy corporations, not small family business. The fortunes of the Walmart and McDonald’s empires will not be seriously eroded if employees gain a better wage. But the lives of hundreds of thousands of Ontarians will be dramatically improved. And so will our local economies in communities large and small.
The fact is poor people don’t take their wage increase and stash it in some offshore tax haven. They spend it in local stores and in their local community. Past studies of the impact of minimum wage increases in a number of jurisdictions verify that reality.
No doubt the business lobbyists will warn of dire consequences if the minimum wage is raised significantly. They said the same thing six years ago, and the sky did not fall because poor people got better incomes.
It is sometimes asked why the labour movement would put so much energy into raising the minimum wage. There aren’t many union members making that, so it’s not about self-interest (although both of us have family members working for poverty wages). The fact is that labour is stepping forward on this issue because our goal is a just and equitable society, and that cannot be achieved as two solitudes drift further apart. We need many voices to be raised in our common effort to make sure nobody is left behind in Canada’s future.
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Photo by Campaign to Raise the Minimum Wage.