Indeed, the minimum wage issue was one of the pieces of fruit that was so low-hanging that the new government moved in its shortened Spring sitting to take immediate action on it. Phased in over several years, the minimum wage in Alberta will move from the level it has been ($10.20/hour generally, $9.20 for liquor servers as it's assumed they receive gratuities) to the NDP's "fair minimum wage" of $15/hour, with no distinction for liquor servers.
Now, full disclosure right off the get-go: I agree with the NDP that the minimum wage has historically been far too low in Alberta. The purchasing power that minimum wage earners have to contribute to the economy and to better their chances at climbing up the socio-economic ladder through continuing education is VERY low in Alberta, where a red-hot economy has in past meant that rent is higher, food is more expensive, and pretty much everything you buy is - relatively-speaking - a bigger bite out of whatever you have left after you pay for the essentials. Sure, the income tax is lower than in some places... but if you're working a minimum wage job, you aren't paying a lot of tax to begin with. And the fact that you're not paying provincial sales tax helps, but when your monthly income is $1632 (gross, pre-tax), saving that extra 5% or so at the till is a difference of $81 if you were to spend every dime you earned - and darned sure the extra cost of living in Calgary swallows up those $81 right quick.
I'm not deaf to the assertion that minimum wage earners should "get an education and increase their earnings potential" - but with what money are they supposed to pay for tuition? And with what time can they go to school? Even assuming they got student loans that covered the full cost of tuition, AND all books and supplies, the fact remains that in order to afford to live, they're still going to have to work a full-time schedule. And god help them if they have children.
The bottom line is that minimum wage earners aren't all "kids in high school working at McDonald's" (50% are aged 25 or older). There are 38,000 Albertans in the workforce who earn minimum wage - they're not on welfare. They're TRYING to help themselves. But the nature of our economy dictates that in order to live anything resembling the life that so many of us take for granted, they have to work 50 or 60 hours per week - and that's just to avoid having to live 2 to a room in a run-down, borderline-condemnable apartment. We're not talking about driving an SUV, vacationing in Cancun and sending little Johnny to Electric Guitar Camp. They're stuck in a situation that - by their own making, as result of their own choices, or because of external factors such as a failed marriage or a pension plan that took a bath over the past decade (nearly 12% of minimum-wage workers are over 55 years old) - by its very nature makes it almost impossible to escape.
ALL of that said, I'm uneasy about increasing the minimum wage by 47% in 3 years. And here's why:
"A rising tide lifts all ships"
Rare (bordering on the non-existent) is the case of the business that saw a government-mandated increase in their cost of doing business and said "well, there's nothing we can do but absorb the hit to our bottom line".
In the case of the minimum wage increase, we are going to see the impact reflected first in the two-pronged approach of price increases at the till and reduced worker hours (whether shorter hours of service or job cuts). You'll pay more for your coffee, and your meal at the restaurant. The drive-thru will be closed. Your movie ticket will cost more, and there will be longer lines at the concession stand because only 2 registers will be open while the other 10 sit unattended.
That's the first thing we'll see, and the first that many people will notice that this policy - meant to help people who in many cases are just barely treading water - has repercussions.
Good business people know they have to tread a fine line when it comes to charging for a good or service. You can only charge what the market will bear, or you'll drive away business - which is bad for your bottom line, and therefore your workers. If Albertans aren't willing to pay $18 for a movie ticket in the world of Netflix, the theatres can't charge $18. So they'll charge what they think we WILL pay - say $15 - and make up the difference another way. That might mean your large diet coke goes up fifty cents. Or it might mean Myrna (72 years old, widow, pension was wiped out by the market in 2009) and Stephanie (23, single mom whose ex moved back to Oman 6 months ago and left her and the baby in the lurch) are going to be let go, or will have to work 40 hours BETWEEN them, instead of 40 hours EACH.
Think about that - stop obsessing over the cost of your diet coke for a second (yes, I KNOW it's already highway robbery - FOCUS!), and think about Myrna and Stephanie. If they were each earning $1632 per month (again, PRE-tax) under the old system, now they're earning $1200 per month - with the 50% reduction in hours. They *might* be able to get another part-time job to cover the shortfall, but then again, there are fewer jobs out there. Those who can't find jobs at all, because employers have to be choosier about who they're hiring with their limited staffing dollars, end up on social assistance. You and me get better service once we get up to the register (maybe), but it comes at a cost to us in terms of our time spent in line, and our taxes going to help the people the theatre had to let go who couldn't find other work in a suddenly VERY chilly job market.
There's another issue that pops up as result of this change, however, and it's one I have yet to hear discussed in the media releases from opponents to the move: This inflation of the minimum wage creates a situation where prices on just about everything rise. Which means that the $15 per hour you'll be earning in 2018 will NOT buy what it would have bought in 2014. Because the price of eggs, and milk, and formula have gone up due to wages in the grocery store. The cost of living has gone up, because landlords can now charge more as the minimum-wage earners have more money (those who were able to maintain a full-time schedule, anyhow). The subsidy for the monthly transit pass has been sharply reduced, or gone away entirely. Student loans are now harder to get, because your income has gone up by 47%, gross (again, assuming your hours of work weren't reduced). Other wages have gone up in the public and private sector, because for those who DO live with family and don't have to be the primary bread winner, why would I take your incredibly stressful office job for $16 per hour when I can do something I enjoy that's a 5-minute walk from my house with little responsibility for a buck less? And the price of just about everything else has gone up, too: Because wages have gone up, and people have more money, and the businesses want that money to cover their rising costs (remember: their expenses have gone up with the minimum wage, either directly to staff or indirectly for services and products they need to carry on business).
I don't pretend to know what the solution is, here... I'm not an economist. I don't even play one on tv. I'm not suggesting we set the minimum wage at $1 per hour so everyone can have a job, and bread will cost a nickle per loaf. The fact that these changes are being phased in over several years is a positive step that gives businesses a chance to do the math and figure out what they're going to do in order to deal with the changing reality. But I have to wonder if, in THIS particular case, the reality of a $15 minimum wage might actually do more to HARM those who earn the minimum wage than it will to HELP them. If their hours are reduced, or they're let go, and the price of just about everything goes up, are they better off?
I'm not the sharpest knife in this particular drawer: there's math involved. I'm counting on you, folks, to have this discussion... discuss below in response to this post, discuss on social media, discuss with your neighbours, and discuss with your MLA. Helping people is good. But this policy might not actually do that - then again, it might. Maybe I'm 100% wrong, and my fears are unfounded. Let's do the diligence. Let's start today, and maybe by Fall Session we'll be able to have an informed discussion about precedents and make sure our government is working from the best available information. Because policy made with fact, rather than dogma, as its foundation is typically much better for everyone.
Including Myrna and Stephanie.
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