Nov 02 2009

Transforming an Economy to Make Minimum Wage Meaningless

Published by at 7:49 am under social sustainability,Vancouver

It’s pretty clear that BC is trailing the pack when it comes to minimum wage. At $8 per hour, we’re dead last across Canada. That’s a shame and it needs to change. But ideally, BC’s business class and political leadership will be able to set a foundation where it’s essentially irrelevant.

BC Federation of Labour’s Jim Sinclair calls the minimum wage situation a disgrace. It’s hard to argue the point.

Given our cost of living, minimum wage in Vancouver should at least be higher than in my original home town of Winnipeg. In Manitoba, minimum wage is set at $9 per hour. My fellow Vancouverites will howl in disbelief as I inform them that a friend of mine in Winnipeg bought a four-bedroom house there a few years back for about $70,000. That’s not a typo — there’s really not a zero missing. Sure, my friend’s spacious place is a bit of a fixer-upper, and it’s not exactly central, but try buying a four-bedroom house on the boundary of Vancouver and Burnaby for ten-times that purchase price. Good luck. That’s just one indication, but Metro Vancouver also has the highest rental rate in Canada. The point is, it’s expensive to live here.

Should someone flipping burgers or delivering pizzas naturally have the scratch for a down-payment on a house virtually anywhere in the country? Probably not. No one is “entitled” to live in Vancouver’s west end or Toronto’s ritzier burbs. Sure, some low-wage earners have to work two or three jobs to pay the rent and put food on the table for their growing families. Well, that’s life. We don’t have a caste system in Canada. The class system here is arguably even more permeable than in the USA, so-called land of opportunity. And there are certainly government programs making it easier for anyone to get the education and training they need to do what they want with their life. Given that, what is a fair minimum wage?

I don’t want to argue the merits of a particular level of minimum wage, somewhere between “enough for someone living with their parents to buy comic books and cigarettes” to “enough to support a small family and keep the fridge stocked with beer”. Frankly, I have no idea what constitutes fair in a society where the top level-CEOs make as much in the first 15 minutes of the year as I do all year.

But frankly, I don’t really want our politicians and business leaders in BC to spend all that much time on minimum wage. Top it up by a buck or two and be done with it until the coffee servers in Osborne Village once again start looking uppity.

Instead, I’d like to hear more about how this province is going to be positioned to train and produce the knowledge workers required to boost our fortunes in coming years. The recession is a temporary bump in the global process of a flattening international economy. North Americans need to become much better at building and sustaining a knowledge economy based on technological innovation, since we know where all the manufacturing and low-skilled labor has moved over the past decades.

If BC is successful in promoting this kind of success to augment its traditional resource-extraction based industries, minimum wage will become irrelevant. It seems natural that the so-called “green economy” will be a big part of this, as there are already plenty of companies in BC building capacity in the fields of alternative energy and more sustainable products. When the economy is roaring again, minimum wage will once more be the preserve of high school students and ambitious but unskilled laborers training at night for future opportunities.

Jim Sinclair calling for an increase from BC’s $8 minimum wage — in 2006

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2 responses so far

2 Responses to “Transforming an Economy to Make Minimum Wage Meaningless”

  1. Durwardon 02 Nov 2009 at 8:51 am

    Hard to argue unless you have a basic understanding of commerce and cause and effect.

  2. Terry Glavinon 02 Nov 2009 at 12:52 pm

    A terrific essay, Jonathon.

    A bit of jimmying with the tax laws to help small businesses could easily offset the potential downside of a good hike in the minimum wage. Even so, as you say, better to dedicate public resources to retooling the economy for the challenges ahead.

    Good man.

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