Minimum wage is poverty

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Pontiac Perspective  Peter J. Gauthier


Pontiac Perspective  Peter J. Gauthier

On May 1 of this year, Quebec will increase the hourly minimum wage to $10.35, an increase of 25 cents. Ontario will increase its minimum wage rate to $11.00 per hour on     June 1, a 75 cent increase.  These wage adjustments have, once again, brought the question of fair wages into the discussion – and the debate is becoming vigorous.
On one hand, it is obvious that, in our current economic circumstances, a wage of less than $15.00 per hour, for a 40-hour work week, leaves many people in dire straits. There are approximately one million Canadian workers who earn minimum wages (385,000 in Quebec). Twenty-eight percent of them are over the age of 35. The idea that only youth, living at home, are minimum wage earners is false. For too many people, minimum wages means living in poverty. The concept of a living wage is not a      reality for these people.
The other side of the story comes from the Fraser Institute. Their claim is that increases in minimum wages reduce the employment opportunities for low income workers. While some workers may gain from the wage increases, others will lose as employers trim back on number of employees and hours worked. The Fraser institute also claims that a 10% increase in minimum wages would result in a decrease in employment of between three and six percent.
One measure of the minimum wage issue is to compare Canada to other countries. The average            minimum wage in the USA is $7.10 per hour, well below the Canadian average of $9.85 (2013 data).  However, a fair comparison requires an adjustment for purchasing power parity (adjustments for the actual cost of basic goods, results expressed in USA dollars). When this adjustment is made, the Canadian equivalent is only $7.59. Using these adjustments, many industrial countries have higher minimum wage rates. For example: New Zealand, $8.17; Australia, $9.77; France, $10.17; Luxembourg, $10.37.
What is obvious to all sides in this  debate is that the minimum wage rate  is only one element in a poverty reduction strategy. The gap between the “haves” and the “have-nots” is growing. Unemployment rates, especially among the under-30 age group, are unacceptably high. And, while minimum wage rates remain a provincial responsibility, the problem affects all Canadians and requires significant action on the part of the federal government. However, the Harper government continues to show favouritism to big industries and to pretend that the provinces do not matter when economic policies are made. The Bible reminds us that the poor will always be with us. But, this is not a reason to ignore their needs.