Sunday, September 15, 2013

The Struggle To Raise The Minimum Wage

I have written several recent posts on the campaign gaining traction across the United States to raise the minimum wage to $15 per hour from the current average of just over $7. That struggle has now come to Ontario, where those living in poverty thanks to the current minimum of $10.25 are demonstrating for a boost to $14 per hour. Raising it to that level would put workers just above the poverty line, assuming a full working week.

The minimum wage campaign, which began Aug. 14, is planning similar days of action across Ontario on the 14th of every month in advance of next spring’s provincial budget, when the Wynne government is expected to weigh in on the matter.

As reported by the CBC, according to Statistics Canada, more than 800,000 Canadians were working at or below minimum wage in 2009.

Lest one think that $10.25 is a princely sum, consider the circumstance and words of some of the demonstration's participants:

Toronto meat packer Gyula Horvath has to work a gruelling 50 to 60 hours a week to survive on his wages of just $10.25 an hour.

“It’s no good,” the 22-year-old Hungarian immigrant, who is also supporting a wife on his meagre minimum wage earnings, said Saturday. “It’s very hard to pay rent.”

Call centre worker Jenny Kasmalee, 38, can rarely afford new clothing or other personal things on her $10.25 per hour.

“I have always worked for minimum wage,” she said. “It’s not much.”

Estina Sebastian-Jeetan, a mother-of-two who attended the rally, described some of the challenges she faces as a low-wage earner. "Sometimes I skip my medication in order to make ends meet," she said.

Cogent arguments have been made that having a living rather than a subsistence wage would benefit our entire society. As pointed out by economist Jim Stanford, when people have some money to spare after paying for rent and food, they are likely to spend it, thereby stimulating the economy.

And of course, it is wise to remember that minimum wage jobs in this economy are no longer the domain of the poorly educated. Many university graduates, struggling to find their place in the world, are toiling in retail and service and other traditionally low-paying sectors.

The dean of social sciences at McMaster University in Hamilton, Charlotte Yates, observes that changes in Canada’s labour market are permanent – most notably a penchant for part-time and contract hiring – and are not a temporary blip.

Says Judith Maxwell, past chair of the Economic Council of Canada:

“People over their forties in Canada have no idea what it’s like for a young person trying to find a pathway to adulthood right now.”

Predictably, business is much more conservative and restrained on the question of minimum wage increases. Last week the Canadian Chamber of Commerce published a report, the most pertinent being the following conclusion based on a survey of its members:

In the survey of 1,207 members, 46 per cent said the minimum wage should rise with inflation.

Of course the main problem in tying any increases to inflation means that the workers would continue to live in poverty; they simply wouldn't sink any deeper, which to me is simply another way of ignoring the problem.

The poor have little voice in the formulation of government policy. The moral responsibility for change therefore resides with those of us who have had the good fortune to work productively and profitably throughout our lives; we need to add our voices to theirs and promote change. A letter to one's MPP would be a good start.


  1. Lorne, what you have against 1% Canadians whose profits might be impacted.

    Have you not listened to Kevin O'Leary. It is a great news that profits of 1% are high. They will ultimately trickle down to ordinary workers and poor. People have no patience. ;)

    1. Too true, LeDaro. Free enterprise apostate that I am, I have little faith in the money gods. ;)

  2. Business needs customers to survive, Lorne. It's simply self interest to pay workers enough to buy what they produce.

    1. It is a shame that that simple truth seems to elude so many, Owen.

  3. Lorne and Owen, Henry Ford (the founder of Ford Motor Company) got it right. He paid his workers very well so that they could buy the cars he was producing. Today's businessmen just don't get it.

  4. hi Lorne...nice post. I don't think a lot of older Canadians have any idea how bad the job market has become for young people in this country. Because it's not just the low pay, it's the hours. Most jobs, especially in retail, are now temporary. There are no guaranteed hours, no benefits, no nothing. It's a real jungle where the workers are modern slaves. And of course, as you point out it makes no economic sense either. The capitalist pig doesn't work anymore unless its greased, and now that they maxed out our credit cards,if they don't put more money into the hands of consumers to keep the hog squealing, who will?

    1. Hi Simon. As your comment points out, there are a number of very real obstacles that young people face today just in finding work that isn't part-time and temporary. I am constantly struck by the shortsightedness of the business mentality as seen in its failure to nurture its potential customers by offering solid work. I think you have identified one of the reasons for that shortsightedness: credit. Now that people are reaching their credit limits, who indeed will 'keep the hog squealing'?