It’s supposed to be a partnership, isn’t it?

So another Minimum wage increase was announced in the paper this week. Minimum will be going up to $10.00 Oct 1st, 2011. now to be fair this isn’t news, the gov’t announced this a while ago. Perhaps a slow day for the freep?

Anyway, there are a few issues I have here ( but please don’t mistake this as meaning I’m against people earning a fair wage):

First, Labour Minister Howard states that this is good for business because it helps attract and retain workers. Now there are several problems with this statement:

  • That’s a comparative statement. it means it helps attract and retain workers compared to somewhere else. Now given that minimum is just that, what is she comparing it against? Other provinces? I hate to tell you this, but NOBODY is going to move to Manitoba because our minimum is $0.50 ( $1000 gross per year) higher.
  • It’s not minimum wage that attracts and retains workers, it’s working conditions, regular increases and benefits. By forcing this on small business, it may have the opposite effect and cost those businesses more for untrained labour, which means less to spend on experienced workers.
Beyond that there are several problems I have with the gov’t soapboxing about minimum wager increases:
  • The pool of employees (and low income category employees ) that make minimum wage as a subsistence wage is very, very small. What do I mean by the above? Factor out students ( often living at home), serving staff ( tips), those that work at minimum wage jobs with regular increases ( heck you can get more than minimum as a starting wage a timmy’s!), and you’re left with a very small pool of employees.
  • It lowers the standard of living for those low income earners earning slightly above minimum wage ( unless for some reason they receive incremental increases.
And most importantly, fairness in workplace wages is a three-part relationship. A partnership between employers and the province with employees. The employees provide fair and acceptable work. The employers provide fair working conditions, wages and benefits. And while the gov’t may think their part in this is legislating minimum wage increases, it really isn’t. Their part is to assess appropriate taxation levels for low income earners.
And that’s where they fail miserably. The NDP, the party of the working class, collects more provincial income tax on earners under $40K than anywhere else in Canada. They haven’t kept pace with other provinces with respect to tax levels for the lower class, and they certainly haven’t kept pace with basic personal exemptions when compared with other provinces. And I think you would be hard pressed to find anyone who would argue that we get that much more from our gov’t in Manitoba than any other province.
So be a partner, reduce the income tax amounts on the lower class and raise the personal exemption ( doubling it seems appropriate). Then you will give the lower class some relief. But of course there is a big problem with that. If you increase the personal exemption and decrease tax rates, you collect less gov’t revenue.
If you push minimum wage increases as your support for lower income earners without increasing the exemption or decreasing the tax rates, your gov’t income doesn’t just stay static, it actually increases ( just over $100 for each minimum wage earner).
I guess we can see where our provincial government’s priorities lie.

2 thoughts on “It’s supposed to be a partnership, isn’t it?

  1. True. I started a job several years ago at minimum wage. Over several years my wage started going up, until I was earning over 40% more than minimum. Then minimum started going up again, and by the time I left, I was earning only 7% above minimum.

  2. I personally know four business owners who are going to cut back on part time staff or let some go due to the minimum wage increases over the last few years. One in particular has already had to reduce his staff from 4 to two and he is contemplating reducing that to one after the summer.

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