Minimum wage should reflect province's prosperity

Lana
Lana Payne
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For most of January - in between snowstorms, high winds and rain - the government has been out talking to citizens about the contentious issue of the minimum wage.
The Williams government promised in its election blueprint to consult on a schedule of increases to the minimum wage, with a view of getting it to $10 an hour by 2010 - restoring some level of economic justice after three decades of erosion.
It is now set on delivering on that promise.
The minister responsible for this task, Shawn Skinner, and his parliamentary assistant, Keith Hutchings, have been getting an earful - some of it from people like me and dozens of other citizens, social-justice advocates, anti-poverty activists, unions and labour organizations, women's groups, students, faith-based organizations, community groups and working people, as well as businesses and business organizations.
And now the minister has to weigh all that information - the economic, equity and social-justice arguments - against what economist John Kenneth Galbraith called the pleas from those who don't wish to pay the wage.
This will be no easy feat. The minimum wage is one of those issues with clearly defined sides.
There are those who are on the side of the economy serving citizens and not the other way around, as Sister Mary Tee of the Sisters of Mercy pointed out during the consultations.
There are those on the side of people being paid a just wage for the work they do, something Franklin D. Roosevelt referred to as a fair's day pay for a fair day's work.
There are those who understand that work and being paid decently for that work means you don't have to look into the eyes of your child and say "no" to every single modest request, annihilating an adult's dignity and a child's sense of wonder.

Predicting disaster
And then there are those who argue that a higher minimum wage will cause the sky to fall in, cause the cost of goods and services to skyrocket, and hurt those it is supposed to help. Ironically, they don't argue that the overpaid CEO's wages will hurt the economy or that increasing their own profits or disposable income will cause irreparable harm.
These are the same tired-old arguments that were used when unions fought for things like an eight-hour workday, an end to child labour, and better health and safety laws.
Modern labour market and economic research, including new reports out of the Organization for Economic Co-operation and Development (OECD), point out the overwhelming benefits of higher minimum wages, including higher productivity.
On the issue of the cost of goods and services, what is ignored by those same business organizations who argue against higher minimum wages is that it is not modest increases for the low-waged that will boost the cost of goods and services, but rather the demand from those who make higher wages and have more disposable income.
But local business is benefiting from those hard-earned paycheques from commuting Newfoundlanders and Labradorians, and so no one would dare suggest that these wages are bad for the economy. Yet somehow modest increases for the low-waged will have dire consequences. How is keeping people poor good for the economy or local businesses?
And let's not forget the oil. It is driving our economy and increasing the cost of living, which is why it is so important to make sure that those with the lowest wages are not worse off because of this prosperity.
Economic indicators for the province have never been better. Just last month, the provincial government announced the lowest unemployment rate in 25 years and the highest employment rate in three decades. Economic growth was off the charts in 2007 and retail sales have never been better. A schedule of increases to the minimum wage can be more than accommodated.
Leaving it all up to the marketplace has serious consequences, especially for the most vulnerable, who are often those working for low wages. They need the government to act for them.
In red-hot Alberta, the gap between the rich and everyone else is widening. And even with lots of jobs, not everyone is making big wages. Indeed, more than one in five working people in Alberta make $12 an hour or less.
There are many reasons for this, not the least of which is Alberta's failure to distribute the wealth in a meaningful way. One such way is to lift the wage floor.
Newfoundland and Labrador's premier has said he does not want just those already doing well to benefit from our economic growth.
Skinner has added to this vision by speaking about a "living wage" that looks at the real needs of real people raising families.

Bringing benefits
On the issue of who benefits from prosperity, the government has been saying and doing many of the right things - a higher minimum wage, a poverty-reduction strategy, frozen tuition, post-secondary needs-based grants, free textbooks for kids, and a drug plan for low-income Newfoundlanders and Labradorians. All of these are important planks in a society that values equity and dignity.
These, as well as many other public policy measures, have been advocated by social organizations for many years. But as those who do this advocacy work know, it still requires political will.
It is the willingness that inspires hope - hope that we can get prosperity right.
(Note: The goal of a $10 minimum wage by 2010 has been promoted by a coalition of groups and activists promoting a just minimum wage. I am proud to be part of that Make Work Pay Coalition.)

Lana Payne is a former journalist who is active in the labour movement. She can be reached by e-mail at lanapayne@nl.rogers.com.Her column returns Feb. 17.

Organizations: Organization for Economic Co, OECD

Geographic location: Alberta, Newfoundland and Labrador

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