Minimum wage increase needed

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By Dale Kirby

In August, the Dunderdale government quietly announced a review of the minimum wage.

Unlike the last minimum wage review, no public consultations will be held this time around. The deadline for public feedback is Sept. 15.

The minimum wage in Newfoundland and Labrador has been $10 per hour since June 2010.

It is worth noting that our province has the highest proportion of minimum wage earners in Canada.

Over two-thirds of those working for minimum wage in Newfoundland and Labrador are women.

A large proportion of minimum wage positions are concentrated in the service and hospitality sectors.

Harm to business

It is increasingly accepted that, despite suggestions to the contrary, there is no reason to believe raising the minimum wage will harm businesses or limit job creation.

In fact, over 650 economists, including five Nobel Prize winners, issued a statement in 2006 indicating that minimum wage increases significantly improve the lives of low-income workers without the adverse effects claimed by minimum wage critics.

Regular increases in the minimum wage benefit our economy as a whole because of the overall increase in purchasing power that results.

For example, low-wage workers tend to spend their new earnings on basic needs and services purchased from local businesses.

The Newfoundland and Labrador New Democratic Party does recognize that many smaller businesses such as family-run retail shops, local restaurants and neighbourhood grocery stores are increasingly being squeezed by the practices of big-box outlets and mainland retail chains.

This is why we continue to call for a reduction in the provincial small business tax.

Costs rising

It is important for the minimum wage to keep up with our increasing costs of living.

The cost of food, electricity, transportation, and other expenses are going up year after year. Increases in the cost of housing are causing difficulty in particular.

Lower-income renters are experiencing more problems in finding affordable housing, while the dream of homeownership is increasingly out of reach for lower wage earners.

Regular increases in the minimum wage will also help ensure that minimum wage earners are making an income that is above the poverty line.

At present, many minimum wage earners in Newfoundland and Labrador earn incomes that are below or only slightly above the poverty level.

Failure to increase the minimum wage will come at a cost to the province in the long term because low wages result in additional costs for taxpayers.

For example, low wage workers and their families have incomes that force them to seek assistance from government services and programs like subsidized housing and income support.

For these reasons, the New Democratic Party is asking the Dunderdale government to increase the minimum wage to a level that will help our lowest wage earners with their increased living costs.

Regular increases

We also believe that the province should establish a plan for indexing regular increases in the minimum wage.

Planned incremental increases would lend greater predictability and transparency to the process for wage earners and businesses alike.

Dale Kirby is the NDP MHA for St. John’s North.

Organizations: New Democratic Party

Geographic location: Newfoundland and Labrador, Canada

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Recent comments

  • Morgan Farechild
    September 05, 2012 - 04:46

    Increasing wages is a natural response to a heated economy, which can lead to inflationary spiral, prompting central banks to raise interest rates. NL is in a mixed blessing situation whereby it's interest rates are set by Ottawa but is in an isolated heated economy. so there is increasing upward pressure

  • Messed up
    September 04, 2012 - 10:46

    "so lets pay them less so I can keep more of my money. Lets move to online shopping and eliminate some jobs which creating other jobs. If at the end of the day less people are employed, then the company can make more money and pass some of the savings to customers." -Less jobs equals more people on social assistance, Ei, income support...there will be no one shopping at your stores, spending money IE, making you any money because they won't have it to spend. So you'd rather pay more taxes to keep these people going, instead of providing a decent wage and place to work? this world is backwards.

  • Too much greed
    September 04, 2012 - 10:37

    Employers want you to work your maxium work, for Minium wage. As for you: Business Man, anyone who self admits they would fire someone over the fact that it would save him a couple dollars at the end of the year, well really, thats pathetic, I hope any business you have crashes and burns. Those people you are talking about are your employees, the lively hood of your business, and maybe you'd do less firing if you treated them a little better. I find it hilarious that someone would really complain over a 20 cent increase, if there business are so successful. Your talking about living human beings, people! People that have families and homes, and lives to maintain, to keep the local economy thriving. You put down those uneducated people that make 10 bucks an hour, the same people who will smile and bag your groceries, make your burgers, and provide top notch customer service for many business all over the province. Without those uneducated people this province would crash, it's the underdogs that pay incredible tax rates, with no breaks, have to rent to pay someone elses mortgage and work two jobs just to keep there family from drowning in debt. Most people will accept a job based on that salary with the hopes and promises of many employers that say that wage will increase with experience, everyone has to start somewhere!

  • Margo C.
    September 04, 2012 - 09:08

    So just how many of you are willing to work for and live on minimum wage? "It's okay for others, but I'm better than that." Bunch of hypocrites!

    • a business man
      September 04, 2012 - 09:20

      That is BS Margo. I am not willing to work for an live on minimum wage. I feel this way not because I am better than that, but because I am too educated and talented for minimum wage. Unfortunately, an unskilled uneducated worker cannot say the same. As far as I am concerned, the minimum wage is far too HIGH for unskilled uneducated workers. If people want more than the minimum wage, they have to be able to offer their employer more than the minimum in skills, and education. If they cannot, then they get nothing more that minimum wage, which in my opinion is too much

    • wtf
      September 04, 2012 - 12:11

      Hypocrites??? People make choices everyday. Some choose to invest in education, or move to where there's higher paying jobs. Others choose minimum wage.

  • It's not the wage it's the attitudes of the employers
    September 03, 2012 - 16:58

    Minimum wage is not a mandatory wage. Newfoundland had a 6.1 percent increase in GDP last year. The highest in Canada. Growth is up, business is booming as it were and profits are rolling in. Unfortunately almost none of those profits are turning into additional wages. The lady at the liquor store who bags your 2 bottles of wine gets paid almost double what the poor girl in Dominion makes for bagging your months'worth of groceries. An unskilled labourer can typically expect to make more money in Alberta than a tradesmen in this province in some instances - this isn't primarily because of Alberta's higher cost of living because cost of living is not equatable to cost of rent and in fact Newfoundlands cost of living AND rent isn't that far off. What it comes down to is employers in this province giving their workers the shaft because we're used to low wages and they know they can get away with it. It's as simple as that. Walmart is the largest retailer in the world and pays newfies double what it pays texans because they're only paying minimum wage anyway. Employers need to stop thinking about how to pay their workers as little as possible but how to provide their workers with a fair wage that represents the work that they do. Minimum wage shouldn't need to be increased - companies should be prepared to share their earnings as they grow through wage increases. If Mc Donalds and Wal - Mart can afford to pay everyone 15 dollars an hour with little to no significance to their own bottom lines then they should be willing to do it but they aren't and so we the public get to fight and bicker amongst ourselves and our politicians on how to get paid the fair wage that these companies ought to be paying us anyway out of sheer ethical responsibility. But while we bicker and argue, they make a thousand dollars laughing at us over a bottle of don perignon. Consider that;.

    • a business man
      September 04, 2012 - 07:25

      In addition to my fast food chains, and gas stations, I am a lawyer by trade. I completely disagree with you because part of my law practice is to advise employers on how to pay their workers as little as possible. Yes, they pay me lots of money to help them pay less and less to their workers. I also disagree because not all employees should get a share of the profits because not all employees are important. Take my call center. My engineers, sales staff, IT staff, supervisors, managers, and executive are all important and they DO get a share of the profits. Take my telemarketers...they are unskilled, and uneducated. they do a job that anyone can do, and they can be replaced withing 15 mins. Why should I give them a raise? They are not special. they bring minimal value to my company, so they get the minimum wage. And, my US sales team brought in a new client that has doubled my business. So, I gave them a share of the profit. But I gave nothing to my Canadian sales team because they did nothing to contribute to the acquisition of the new client. At the end of the day, I do agree with profit sharing as a principle, but I must add that not every employee deserves a share of the pie.

  • Tom
    September 03, 2012 - 10:05

    Minimum wage in Canadian provinces range from 9.50 in Sask, to 10.25 in Ontario and BC. Newfoundland is about average at $10.00. With our economy booming, I see no reason why minimum wage shouldn't increase at least at the rate of inflation: about 20 cents per year.

    • a business man
      September 04, 2012 - 07:17

      I own gas stations and fast food chains in NL. I pay minimum wage. If the minimum wage goes up, I will increase my prices to pass the costs to the customers. I will not end up with less so my employees can have more. And if I cannot pass on the costs (like with gas), then I will fire an employee and save money in that way. At the end of the day, no matter what, I will not accept less money so my employees can have more

    • Milton
      September 05, 2012 - 07:53

      "I do agree with profit sharing as a principle, but I must add that not every employee deserves a share of the pie." If every employee is contributing to that profit pie should they not also be entitled to their share? It's ironic and would be funny if it wasn't so disturbing that you put on display here all of the things you believe you are entitled to while disparaging people who feel the poor should be entitled to a living wage.

    • a business man
      September 05, 2012 - 17:31

      for example, I have a US call center and a Canadian call center. The last quarter, corporate profits went UP because the US center got a new contract and increased their work by 50%. As a result, I paid hefty bonuses to my US staff, simply because they made me more money. I gave nothing to my Canadian staff because they had nothing to do with the securing of the contract, or the additional work. As such, they did nothing to contribute to the increased profits, and do not deserve a single penny of the added profits. That said, I did nothing to get the contract either, but I get money because I am the owner.

  • Christopher Chafe
    September 01, 2012 - 19:10

    While Dale Kirby is at it, why don't he go after the thousands and thousands and thousands of Newfoundlanders who are working just above minimum wage ($11-$15 bracket) and demand that their wage also increase. I am sorry if this next comment sounds rude but there is no way in H-E-L-L should an uneducated unskilled individual just out of high school come out and make just as much as those with a post secondary education. Right now I make a pathetic $13 dollars an hour, after spending $45k on 6 years of training. Mr. Kirby where is the justice in that!!!!!! And before you say move you'll make more money..........that day is comming all too soon if things do not change in this province!

  • Hunter
    September 01, 2012 - 17:29

    Ok so we shouldn't raise the minimum wage so-as-to protect the small businesses.... So why don't we implement a strategy where-in we regulate the major retailers. If Costco; Walmart; Dominion; and Sobey's had their hours of operation regulated more stringently, there may be more for the Mom & Pop operations. Sunday Shopping dealt a blow to the corner store and local garage. Originally Brian Tobin said there was a "Gentleman's agreement" these big retailers would only be opened for 8 hours on Sundays. Today they open at 8am and close at 10 & 11pm on Sunday - Just like they do any other day of the week. Further, some of these stores are opened 24/7. And all this to appease their senior managers and shareholders up-along. If the big boxe store operating hours were regulated (eg. 9am - 9pm Sunday thru Saturday and 12noon - 6pm on Sunday), there may well be some sales opportunities available to Mom & Pop. Further if the box store's automotive departments were only allowed tire & oil changes, then Joe's Garage may stand a chance. But then, government wouldn't see as great a revenue from the retail sales taxes that these big retailers generate. Government is at fault for the system as it exists. Maybe they should think outside the box instead.

  • Maggy Carter
    September 01, 2012 - 13:11

    As Kirby acknowledges, many small, local, family run businesses are suffering badly at the hands of big box stores, chains and franchises. He is totally wrong in his view however that this can be corrected by lowering the income tax on small business. Many small businesses have been so marginalized by the big boxes that it is all they can do to survive - let alone make profits that would incur taxes. Some people are indifferent to the plight of small business - arguing that if they can't compete without government concessions, then they should close shop. In truth small business has never argued for special treatment - only that there be a level playing field which at the present, of course, does not exist. Small business, for example, is disadvantaged far more by government red tape than the big guys. They don't have the luxury of having an accounting department or legal department, the role of which in part is to deal with hurdles created by government. The distribution and wholesale segments of business have changed dramatically over the past 40 years such that big boxes like Walmart and Costco can sell goods for less than the small retailer can buy them. Moreover, the percentage of full-time workers in small business is much higher than in the big boxes and franchises - and they are generally better paid. The strategy of big companies is to higher more workers for fewer hours per week in order to avoid statutory obligations regarding lay-off notice, benefits and pension. Accordingly their cost of labour per unit of sale is much lower than for the little guy. Governments also fail to understand that fees shipped out of province every month by franchisees to franchisors are, in effect, untaxed profits and not true costs as is presently interpreted under tax rules. The problem is that small business have few people speaking for them. This job used to fall to the Board of Trade and similar organizations but all of these groups have long since been co-opted by big business and industry. A few small business owners still attend the rubber chicken dinners for the endless string of come-from-away executives looking for a local platform for their corporate pitch, but most understand they have zero input or impact on the Board's policies. The day is fast approaching of course when there will be no small, locally owned enterprises any more. At that point, many consumers will - for the first time - begin missing the superior knowledge, service, friendliness, and uniqueness that separates small business from the large, faceless multinationals.

  • NowIsee
    September 01, 2012 - 11:19

    So increase the min wage says the NDP. OK Dale lets say it gets increased a dollar per hour . The farmer selling his milk to us hires a laborer at a min wage, so his pay increases cutting into his cut. The truck driver needs a dollar an hour more, the helper with him as well. The store owner has to increase his laborer's wage a dollar an hour more too. Dont forget the people behind the counter and doing paperwork for those small businesses. Oh yeah and those on welfare would also need more of my hard earned cash as well. They should keep up to the times of course. How much is my milk going to cost me now Dale? Does the NDP see an end to spending the money or does it just fall from your money tree? Isn't it just as well for us to become a cashless society and work on our good graces. I could go for that. Pick my own job, my own hours and quit working for a living and retire at 30. Then I could go back and get that law degree I always wanted as your NDP is also pushing for free education. Ahhhhh the NDP way is the life for me!

    • a business man
      September 02, 2012 - 12:33

      Good post. I would be happy to see anyone of those people cut out of a job if it leads to cheaper prices for consumers. Not everyone can have a livable wage, and not everyone does work that deserves a livable wage. So essentailly we have a choice of paying the workers what they deserve, or paying more so they can afford to live. I go to work for the benefit of MY family, not the family of the workers, so lets pay them less so I can keep more of my money. Lets move to online shopping and eliminate some jobs which creating other jobs. If at the end of the day less people are employed, then the company can make more money and pass some of the savings to customers.

    • Tom
      September 03, 2012 - 09:53

      You picked a pretty bad example with the milk industry. The price of milk is kept artificially high by the supply management cartel. Because supply is determined by quota, an increase in labour costs is unlikely to affect milk prices. The cost will be born by producers, not consumers.

  • a business man
    September 01, 2012 - 11:12

    While I completely disagree with the idea that the minimum wage needs to be increased, I am please that I have the opportunity to provide my feedback and I have done just that. I have indicated in my feedback that the minimum wage is too high FOR UNSKILLED UNEDUCATED workers, and asserted that any minimum wage increase will lead to jobs done by unskilled uneducated people will be lost to cheaper jurisdictions. Like the gas station I own....I cannot move that job. But the sales office, I will certainly move it. I have also recruited my business/investor colleagues to provide the feedback against minimum wage hikes too. The article talks about the rising cost of living, but says nothing about what benefit increasing the minimum wage will have on employers. Sure, people cannot afford the basics, but why reach into my pocket. On the other hand, I view the minimum wage jobs as bad jobs, so if they go, then I will be happy too. Either way, the minimum wage is too high for unskilled and uneducated workers. It needs to be lowered to be consistent with the skills knowledge and experience (or lack thereof) that the worker has. Then, as parents, we must do what we can to send our kids to top school and ensure they do not end up unskilled and uneducated. The solution is not to prop up those who do not have the skills or education to earn a living wage, but rather to help people get the education needed to get good jobs. Employers should all unite and remind this government that labour is just over $7/hour in the USA. Frankly, all jobs done by unskilled uneducated should be moved there anyway. As businesses, we create the jobs, so this government must put US (businesses) first, or else we will find another government (likely in the USA) that will put us first.

    • Milton
      September 05, 2012 - 07:20

      "Sure, people cannot afford the basics, but why reach into my pocket. On the other hand, I view the minimum wage jobs as bad jobs, so if they go, then I will be happy too" I guess the idea is to take some of the money you steal from your workers and give it back to them so they can continue to live their lives as your slaves. If I were you I would not be so happy to see these slaves lose their jobs because they will eventually be coming back to take what's theirs. You can claim profits as yours but we all know who created them.

    • karry
      September 11, 2012 - 12:24

      @ business man you are everything that is wrong with the world today. There are thousands of people around the country who are underemployed, highly skilled educated workers who can not find work. If we didn't have unskilled workers you wouldn't have a business my friend. If everyone was highly educated and skilled workers there would be no one willing to do your dirty grunt work or you would be paying an engineer $50.00/hr to pump gas.

  • Too Funny
    September 01, 2012 - 10:10

    "It is important for the minimum wage to keep up with our increasing costs of living." Hmmm. Over the last ten years inflation (cost of living) rose about 20% while the minimum wage rose 80%. Somethings not adding up.