Keep the politics out of minimum wage

$15-an-hour minimum wage hurts the most vulnerable

That’s right, I said it. The groups pushing for minimum wage to be raised to $15 an hour are playing politics with the most basic of economics and playing that game will leave the most vulnerable out in the cold.

First off, who are the most vulnerable that I am referring to? I’m referring to young people, seniors on fixed incomes, not for profits and small businesses on tight budgets that are trying to keep their head above water.

Social action groups who are pushing for minimum wage increases internationally are representing a cause that is fundamentally and socially irresponsible. It is also misleading. We know that the majority of minimum wage earners (54.6 per cent) are between the ages of 15 and 24. We also know from a 2007 study by Morley Gunderson that increases in minimum wage cause decreases in employment for teens and young adults. In a study from economist Sara Lemos, she noted that food prices increase as the minimum wage does by reviewing more than 20 other studies on the matter. A panel established by the Ontario Ministry of Labour in 2013 and chaired by Anil Verma reported that in Canada, researchers have generally found an adverse employment effect of raising minimum wages, especially for young workers. Typically those studies find that teen employment would drop by three to six per cent if the minimum wage is raised by 10 per cent.

The Ontario panel also found that the link between poverty and low wages is weak. The panel noted that some studies even find that a higher minimum wage leads to an increase in poverty. One study found a 10 per cent minimum wage increase was associated with a four to six per cent increase in the percentage of families living in relative poverty in Canada over a span of more than 20 years. The panel explained that the higher minimum wages trigger higher unemployment, which results in more poverty as household incomes drop among low-income families. This is just the surface of the issues, without getting into how this might affect small businesses that are doing their best to keep their doors open or not for profits that are trying to maximize every dollar they have to further their endeavours. In this #Fightfor15 campaign, there has also been little to no consideration for seniors on fixed incomes and how they will be disproportionately affected by these increases.

The business community has a large stake in the economy of the province. For all of the points I have mentioned at this time, it is of my opinion that social action groups are being socially irresponsible. Forget the #Fightfor15 and forget injecting politics into the minimum wage.

Let’s focus on real solutions. In 2018, the Government of Newfoundland and Labrador did the right thing by tying the minimum wage to the consumer price index. This gave both employer and employee certainty on where the minimum wage was heading. This was the fairest solution for both parties. To take it a step further, the Government of Newfoundland and Labrador should consider a tax cut similar to what was seen in Nova Scotia in 2018, which ensured that those who needed help the most received the largest benefit.

I agree with minimum wage advocates in the sense that minimum wage earners should have more money in their pocket. There are just better ways to go about it and aside from raising the minimum wage.

Hopefully our government gets it right.