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The debate behind a higher minimum wage
Alberta’s rising minimum wage has triggered a variety of responses
BY MIMI WILLIAMS
It seems to have surprised many people that Rachel Notley is keeping her promise to raise Alberta’s minimum wage to $15 by 2018. After consulting with various stakeholders last month, the government will soon announce the first increase, set to take effect in October. Based on the premier’s past comments, minimum wage will likely increase to $12 this year, along with a move to eliminate the differential paid to liquor servers whose current minimum wage is $1 less than everyone else’s.
This news triggered a variety of responses from business groups and right-wing think-tanks as well as from workers’ advocates and labour organizations. Critics suggest a drastic increase to minimum wage will trigger job loss because employers are already struggling to make ends meet due to a downturn in the economy. Advocates point to numerous academic studies showing such fears are overblown and low-waged workers with higher incomes will spend those dollars locally, triggering economic growth.
Putting ideology aside, they could both be right. There isn’t one single definitive economic study showing significant job losses because of a dramatic increase to minimum wage. Similarly, there’s no empirical evidence that there won’t.
Economics is not an exact science and neither people nor the market is rational. Many people are saying very loudly that by raising the minimum wage, the government is interfering in the economy and this will have negative effects. Those people need to be reminded that if we adhered to strict rules of supply and demand and government kept their nose out of things, we would not have a Temporary Foreign Workers Program and McDonald’s in Fort McMurray would be paying its cashiers $500 an hour.
To complicate matters further, the debate has given rise to calls for a third option: no minimum wage at all. This argument suggests a universal guaranteed income with wages determined by free market principles of supply and demand replace a minimum wage.
If society has an obligation to ensure that the most vulnerable among us have their basic needs met, increasing the minimum wage is a small step for a small group of people toward that ideal. But an increase on its own, without addressing critical needs such as affordable housing and adequate child care, will leave low-waged workers in the same, dire situation they find themselves now.
Remember not all low-wage earners are teenagers living at home with their parents. Many workers over 55 fall into the group. Those seniors aren’t working those jobs for fun and aren’t living in their parents’ basements. As baby boomers retire, many are finding their pensions inadequate and are taking jobs theoretically intended for young workers just entering the labour market. A looming pension crisis will significantly affect seniors taking on low-waged jobs just to survive.
Will increasing minimum wage solve all of the issues surrounding poverty? No. Will it solve the growing issue of income inequality between the richest among us and the poorest? No. A minimum wage increase will afford some people a slight degree of increased economic stability without placing any substantial burden on the provincial treasury.
However, if combating the ill effects of poverty is the true goal of a minimum wage policy, what is needed is a multi-pronged approach involving social programs, affordable housing and fair taxation levels.
Hopefully, this debate forces us to do some collective and individual soul-searching about our priorities. We can ask ourselves if it’s really important for us to fight for the right to get a $5 hamburger 24/7. Or we can frame the debate in terms of finding a way to ensure everyone has access to adequate shelter and the basic necessities of life. Looking at things in that way might lead us away from the concept of any minimum wage at all.
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Documentary and discussion night
Come watch "Inequality for all" and discuss income inequality and the $15 minimum wage.
"In this film, Reich deftly navigates the complexities of economic theory to illuminate the now-familiar story of how the rich are getting richer, and the poor poorer."
Thursday, July 23 at 7 pm at Alberta Avenue (9210 118 Ave).
View documentary trailer here:
REVIEW - INEQUALITY FOR ALL
BY JESSICA MACQUEEN
Inequality for All (2013) is a documentary following the diminutive and delightfully funny Robert Reich—political economist, best-selling author, UC Berkeley professor of public policy, and Clinton’s former secretary of labor—as he examines the troubling issue of widening income inequality in the United States.
The global financial crisis of 2007-08 and the subsequent rise of the Occupy movement launched this issue into public discourse. In this film, Reich deftly navigates the complexities of economic theory to illuminate the now-familiar story of how the rich are getting richer, and the poor poorer.
The film sidesteps partisan politics and high level economist jargon in favor of telling an accessible, human story about the struggles of the lower and middle classes to make ends meet.
Although the film addresses American income disparity, it holds relevance for Canadians also, as Canada’s income inequality is among the fastest-growing in the developed world. Since 2008, Canada’s top-paid CEOs have seen their pay increase at double the rate of the average Canadian worker.
In light of the mounting gap between North America’s wealthy elite and the rest of us, Inequality for All delivers a powerful message about the impact of income inequality on the economy, the political landscape, and democracy.
Reich shines as a passionate, critical voice speaking up for the little guy and calling attention to the injustices wrought by an economic system that fails a significant portion of the population as
well as economic policies enabling income inequality to grow unchecked.
A committed educator, he has spent his career helping people understand the economic challenges of our time. This film continues his life’s work by delivering a compelling lesson in economics that sheds light on the economic policies at the root of today’s working class struggle.
The Alberta Avenue neighbourhoods are very diverse, rich with history, art and culture. The area is a destination for its many ethnic shops and restaurants and its numerous fantastic festivals.
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BARD OF THE AVE
Poetry Blog - Poetry written in and about Alberta Avenue from local poet Marlene Salmonson