Canada due for minimum wage debate

Thursday was another day of fast-food protests in the United States.

Thousands of low-wage workers in over 100 American cities took the streets with strikes and rallies amid a push for higher salaries.

The workers, organized by the Service Employees International Union, want the federal minimum wage to be increased to $15/hour from the current rate of $7.25.

With increasing income inequality around the world, residents of other countries are also debating their minimum wages and some governments are actually taking action.

Germany, for example, just introduced a minimum wage for the first time; starting in 2015, companies in the economic powerhouse of Europe will have pay their lowest earners more than the U.K. or Spain.

In Switzerland, there is an initiative afoot to ensure every Swiss adult earns a ‘basic income’ — a guaranteed income if you will — of about CDN$2,800/month.

Conversely, some in Australia are calling on their government to decrease their minimum wage: their’s is among the highest in the world at approximately CDN$17.45/hour for working adults (lower for people under 18) Should Canada be having its own minimum wage debate? Should government be taking action?

Depending on which experts you believe, Canada’s income inequality is really high or at an all time high.

There are approximately 3 million Canadians living under the poverty line and about 1 million Canadians who earn minimum wage — 28 per cent of which are over the age of 35. (In the U.S., 3.8 million workers earn wages at or below their federal minimum wage) A recent report by the Canadian Centre for Policy Alternatives suggests that the Ontario’s minimum wage of $10.25/hour drags people into poverty.
They suggest a minimum wage of $14.50/hour.

A research director of the Toronto-based Broadbent Institute, says that policy makers in this country should be paying attention to what’s happening down south.

“While the income gap is wider and more pronounced in the United States, we know that lower and middle-class wages have been stagnant for decades here in Canada,” he told Yahoo! Canada News.

“Like in the U.S., part-time, precarious work has become the new normal for many, particularly Canadians working in the service industry.

“The fast food strikes in the U.S. reflect a growing consensus — one that crystallized during the occupy movement — concerning the problem of rising inequality.”

To the benefit of workers here, Canada does have more worker-friendly unionization rules than the United States; it’s easier for workers to organize.
That’s something Sas seems to recognize.

“Though the unions that once protected workers and their wages remain under constant attack, there have been promising moves by baristas and other low-wage service workers in Canada to organize and unionize,” he said.

“People have [a] sense that the status quo is unfair: far too many working Canadians struggle to make ends meet while the corporations that employ them see their profit margins grow.

“Increasing minimum wages to ensure that everyone who works can make an adequate living remains an invaluable policy tool in the U.S. and Canada alike.”

The opposing view is put forward by the Fraser Institute’s Charles Lammam.

In an email exchange with Yahoo, he said that raising the minimum wage is bad for the economy and bad for low-wage workers.

“Evidence shows that increasing the minimum wage reduces employment opportunities among young and low-skilled workers. Canadian based research finds that every 10 per cent increase reduces employment by between 3 per cent and 6 per cent,” he said.

“Important point is that there’s a trade-off: while some workers may gain from a higher wage, many others lose as employers scale back on jobs, hours, and training. No free lunch exists when governments legislate wage floors.

“Canadian based research also shows minimum wage hikes do not alleviate poverty. In fact the impact on poverty is negligible at best and negative at worst. Part of the reason is the bulk of minimum wage workers don’t belong to “poor” households.”

Regardless of what side of the debate you fall on, isn’t it time we have the debate in Canada — before we see the U.S. style rallies?

Minimum Wages in Canada:
Alberta: $9.95
British Columbia: $10.25
Manitoba: $10.45
New Brunswick: $10.00
Newfoundland and Labrador: $10.00
Northwest Territories: $10.00
Nova Scotia: $10.30
Nunavut: $11.00
Ontario: $10.25
Prince Edward Island: $10.00
Quebec: $10.15
Saskatchewan: $10.00
Yukon: $10.54