Po­lar­iza­tion around new min­i­mum wage

The Hamilton Spectator - - OPINION - Howard El­liott

We live in po­lar­iz­ing times, in a world of­ten de­picted as black and white.

So it’s not sur­pris­ing that pro­vin­cial gov­ern­ment con­sul­ta­tions on the com­ing $15 min­i­mum wage show stark di­vi­sions. Busi­ness groups ar­gue it’s a dis­as­trous move that will ac­tu­ally hurt min­i­mum wage work­ers who will see their hours re­duced, or their jobs dis­ap­pear al­to­gether. Work­ers and their ad­vo­cates, es­pe­cially the work­ing poor, say the new wage will im­prove their lives and make them more pro­duc­tive cit­i­zens, bet­ter able to con­trib­ute to the econ­omy and so­ci­ety.

Who’s right? To be­gin with, let’s ac­knowl­edge that the new min­i­mum wage isn’t a black and white is­sue. There’s too much de­mo­niza­tion on both sides of the de­bate and that doesn’t help any­one. There are le­git­i­mate ar­gu­ments on all sides.

Con­sider, for ex­am­ple, the ar­gu­ment made by PC leader Pa­trick Brown and some busi­ness groups that this is too much too fast. The wage will go from the cur­rent $11.40 to $14 Jan. 1 next year and then $15 the next Jan­uary. That’s a 30 per cent in­crease in a lit­tle over two years. It’s a sig­nif­i­cant in­cre­men­tal cost. In Seat­tle, Wash., a re­cent study found that some work­ers are not ben­e­fit­ting from the $15 an hour wage. That study is dis­puted by oth­ers that show the op­po­site.

Ad­vo­cates point out that one of the rea­sons the On­tario in­crease will be so sig­nif­i­cant, is be­cause the wage was ar­ti­fi­cially low, in part be­cause it was frozen for a decade by the Con­ser­va­tive gov­ern­ment of Mike Har­ris. From 1995 to 2003 it was stuck at $6.85. Had there at least been in­fla­tion­ary in­creases dur­ing that pe­riod, the jump to­day wouldn’t be so daunt­ing. That’s a com­pelling point.

It’s fair and right to ac­knowl­edge that the higher wage will have a neg­a­tive im­pact on some em­ploy­ers and work­ers. That’s to be ex­pected. Changes this dra­matic don’t hap­pen with­out fall­out. But the big­ger ques­tion is: Do the ben­e­fits of a higher min­i­mum wage out­weigh the neg­a­tive ef­fects? To that ques­tion, the an­swer is an un­equiv­o­cal ‘yes’. That’s why so many other ju­ris­dic­tions, here and in the U.S. are con­tem­plat­ing or al­ready have moved to a $15 wage floor.

Writ­ing in Maclean’s, econ­o­mist Ar­mine Yal­nizyan points out that when higher-in­come house­holds see more in­come, it tends to go to­ward sav­ings and dis­cre­tionary spend­ing like travel. But when lower in­come house­holds see more in­come, she writes, “… they spend vir­tu­ally all of it. Most goes to food (more food or eat­ing out), bet­ter health care and more ed­u­ca­tion.”

That sen­ti­ment is echoed by 53 economists who jointly penned an es­say on the sub­ject con­clud­ing the new wage is a “good idea and one that is eco­nom­i­cally sound.” They’re right. Draw­backs con­sid­ered, the new min­i­mum wage is good so­cial and eco­nomic pol­icy, and de­serves the broad sup­port it is re­ceiv­ing.

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