Minimum wage, maximum politics

In a rich province whose economy has left too many workers mired in poverty, the Ontario government is ordering a fast and massive hike in the minimum wage.

For this historic move, the Kathleen Wynne Liberals will receive praise — but also legitimate questions.

Trying to legislate prosperity is neither simple nor always effective.

And when a provincial election is on the horizon, it may not be an act of pure altruism for a Liberal government trailing in the polls.

There can be no doubt that the 32-per-cent jump over the next 18 months in the minimum employers must pay their staff each hour — from $11.40 today to $15 in January 2019 — will make a huge difference in the lives of many low-wage earners.

It will allow them to eat better, enjoy more comforts and claim a slightly larger share of the province’s general prosperity.

No one should be sorry to see these people get ahead. There is enough economic fruit in Ontario for everyone to taste but the pleasures are currently not equally distributed.

We live in an era where automation and globalization have wiped out traditional manufacturing jobs and where there’s a widening divide between the rich, highly-skilled workforce and those who either have no special training or possess knowledge of little value to employers.

Concerns about this growing gap have led governments, like Ontario’s, to experiment with a guaranteed annual income.

But there can also be no doubt that, in this case, forcing some employers to pay higher wages could result in negative, undesired consequences.

Some employers will cope with increased labour costs by cutting jobs, employees’ hours or embracing automation — replacing humans with robots. Or they’ll pass some of their increased labour costs on to consumers in higher prices.

That’s why governments are usually careful when raising the minimum wage, introducing modest increments over an extended time.

This has, until now, been the Ontario Liberal way, too. In 2014, after the hourly minimum wage had been flat for more than four years, the Liberals gave it a small boost — from $10.25 to $11.

There is a fierce and continuing debate between interventionists and free-marketers over the value and consequences of higher minimum wages. Economists often arrive at different conclusions, too.

This much seems clear to us. A moderate minimum wage hike can be absorbed without the sky falling. The 2014 hike didn’t produce dire consequences.

Yet even advocates of higher minimum wages must tacitly admit there’s a limit to what can be accomplished in a short period. If this weren’t true, why isn’t Ontario insisting on a $20- or $25-an-hour base wage? After all, that would really lift people out of poverty.

So while we are happy for all those workers who will soon earn more we are also worried for those who will be told to work less or not at all.

And we are suspicious that a government that has been in power 14 years has suddenly become the champion of the poor.

It couldn’t be trolling for votes from the grateful workers it’s giving a raise, could it?