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Minimum wage: all the rage!

in Featured/To Each Their Own by

Some things are as predictable as a May 24 blizzard.

If you hit up George Street the night before Regatta, for instance, the winds of fate will inevitably pick up in equal proportion and force you to work the next day.

Bands which should never have emerged intact from the ‘80s will continue to successfully convince local promoters to let them play Salmon Fest.

And our friendly neighbourhood Scrooges at the Canadian Federation of Independent Business will continue to oppose a minimum wage increase in this province.

Minimum wage: back on the page

The provincial government has announced the minimum wage review which it committed to in the last provincial election. The three-person committee – comprised of a chairperson, an ’employee representative’, and an ’employer representative’ – will be accepting submissions from ‘stakeholders’ and the general public (granted, the general public are the primary stakeholders) until September 15. They will then make a recommendation to government.

If you’ve got a job – and for that matter, even if you don’t – there’s good reason to participate in this process.

Not least because the provincial government has an easy-to-answer anonymous feedback survey on its webpage, asking participants whether they feel the government should increase the minimum wage or not. What they intend to do with whatever ‘data’ they receive, is a good question. The survey’s got all the methodological rigour of a VOCM Question of the Day: given that it does not even require names, email addresses, or any other identifying characteristics, lobby groups could easily pay their minimum wage employees to stack the results. (Of course, so could you! and your family! and your friends! and your cat and your dog and your Siamese fighting fish! it’s right here!)

The survey’s got all the methodological rigour of a VOCM Question of the Day…

Either way, there’s good reason to keep an eye on this process. You might be surprised what the industry lobbyists – the ones paid a lot more than minimum wage to ensure that those who are paid minimum wage don’t get a raise – propose during review processes like this one.

You said what???

For instance, during the last round of discussions, the Canadian Restaurant and Food Services Association proposed two very nasty, regressive ideas. The first was the obliquely-titled ‘tip differential’ policy. They proposed freezing and maintaining a lower minimum wage for employees who serve alcohol, than for everybody else (so this would affect employees in bars, restaurants, special events and a growing number of cafés). Their argument was that since you supposedly earn tips (which of course, not all bar and restaurant staff earn, which are unpredictable when they do, which are often not divvied out fairly among staff, and which barely compensate for the sort of abuse many restaurant and bar staff encounter on a daily basis) you should be entitled to a lower hourly wage than everybody else.

They also proposed a ‘training wage’ – that “inexperienced, young workers” should earn less than minimum wage for the first three months of their employment. This of course targets many of those with the lowest salaries and highest debtloads – students. Student loans and tuition fees apparently weren’t enough: let’s cripple students with even more barriers just when they’re struggling to start life out on the right foot!

Tragically, business lobby groups have been successful in persuading government to adopt some of these regressive measures in Ontario and Quebec.

Tired old arguments: now even older and more tired!

The standard argument against minimum wage increases is that it might hinder job growth. Well, there’s plenty of data and studies demonstrating this is not true. In fact, the 2009 Minimum Wage Review Committee struck by the Nova Scotia government reported:“One of the arguments raised against minimum wage increases is that they will cause an increase in youth unemployment. However, given the lack of any such relationship in Nova Scotia in previous years, the fact that market minimum wage continues to track above minimum wage, and the overall economic climate, the Committee does not believe that this spring’s minimum wage increase was a significant cause of this downturn…The Committee believes that minimum wage workers should share the benefits of Nova Scotia’s comparatively strong economic performance.”

There’s also compelling evidence that minimum wage increases help to increase retention and reduce turnover and layoffs (this is often attributed to the fact that greater compensation for your work leads to greater productivity on the part of employees and less desire or incentive for job separation – and cost savings to businesses which must otherwise expend considerable time and money advertising, recruiting, hiring and training new employees). With a looming shortage in many industries and workplaces, this should be an important consideration for local employers.

There’s also compelling evidence that minimum wage increases help to increase retention and reduce turnover and layoffs…

The arguments in favour of minimum wage increases are much more compelling – especially in a province like Newfoundland and Labrador, which, according to this 2010 Statscan study, had the highest percentage of workers earning minimum wage in the entire country. It’s a gendered issue, too, considering a higher proportion of women are employed at minimum wage than men.

In a province which is supposedly experiencing an economic ‘boom’, the fact that personal incomes remain below the national average reflects a growing failure to ensure this ‘prosperity’ is fairly distributed. The geographic disparity in opportunities and incomes also reflects a policy problem government needs to address. It’s given plenty of bones to business – the ongoing reduction and gradual elimination of the payroll tax has, for instance, put millions of dollars back into the hands of provincial employers (as the CFIB is fond of patting themselves on the back over). Well, that’s lovely – but now it’s time for the provincial government to couple that with a minimum wage increase to ensure that extra money trickles on down to the workers and consumers that drive this province’s economy.

Time for a concrete plan

There are three minimum wage-related measures the province ought to adopt to help address the growing economic inequality in this province, and the growing challenges average Newfoundlanders and Labradorians are facing with their daily living costs – from home heating bills, to spiking food prices, to the fact housing prices are out of control and vacancies almost non-existent.

First, there needs to be an immediate increase in the minimum wage. Beginning in 2005, our government worked to bring us back up to the front of the pack. Now we’ve slipped behind, with other provinces surpassing our minimum wage (for those keeping count: five provinces/territories pay higher, four pay the same, and three pay less). Time for us to regain our lead – in fact, it’s our responsibility, if indeed our economy is one of the most robust in the country. An immediate increase of $1.50 an hour would help us do that.

More and more jurisdictions are realizing that minimum wage needs to grow annually, and that it shouldn’t require an elaborate government review to decide whether or not to do it. Legislation mandating automatic minimum wage increases tied to inflation would help accomplish this. Several jurisdictions already do this (including Nova Scotia).

Legislation mandating automatic minimum wage increases tied to inflation would help…

But that alone won’t keep our province competitive. The review panel ought to be formalized into a tripartite wage council. Legislation will require at a minimum that the minimum wage increase with inflation. But the wage council could also keep an eye on income, poverty and economic equality levels and recommend additional annual top-ups to the minimum wage.

Last month, France – which has a national law requiring minimum wage increases tied to inflation – also increased minimum wage 2% above inflation. The government explained that it was a necessity to stimulate spending and confidence in the economy.

This sort of policy makes good, basic, economic sense.

The NDP have accused the provincial government of trying to bury the minimum wage review in the dog days of summer. Well, it can be up to you to ensure that doesn’t happen. If you earn minimum wage, you’ve got a vested interested in ensuring it goes up. If you earn more than minimum wage, you’ve got a vested interest as well – invariably minimum wage increases float all the rest of our salaries higher, too.

We’ve got to raise the bar in this province, and raising the minimum wage is a first step in that direction.

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