Freedom Flyer February 1990 Cover

Freedom Flyer 15

the official newsletter of the
Freedom Party of Ontario

February 1990




Article electronically reproduced from:
September 23, 1989


People before profit

It seems incredible in this enlightened day that we could still be engaged in a debate over the merits of minimum-wage laws.

By Susan Eagle
Guest writer

Competing economic philosophies have not only kept the debate alive but pressure from conservative business interests has kept minimum wages far below the poverty line.

As a result the minimum-wage law hasn't protected workers but has contributed to a growing gap between rich and poor.

Statistics from the Canadian Council on Social Development show the working poor increased between 1973 and 1986 by 19 per cent for families and 46 per cent for unattached individuals to a total of 409,480 households in Canada. That does not include those on social assistance.

The increase of 25 cents an hour, which brings Ontario's minimum wage up to $5 an hour won't begin to deal with the real cost of living for workers and their families.

As the Canadian Council on Social Development reports, "In 1975 a fully employed minimum wage worker, who supported a spouse and child in a large city, could earn 81 percent of the Statistics Canada poverty-line income. By 1986 however, this worker could earn only 46 per cent of the poverty-line income. In fact, even if both spouses were fully employed at the minimum they could earn only 92 per cent of a poverty-line income in 1986."

The social assistance review committee, in its report in the fall of 1988, concluded that, "a minimum-wage job has never yielded sufficient income to provide adequately for the costs of raising a family, but today the minimum wage provides an insufficient income to support even 1 single person in many parts of Ontario."

As minimum wage levels continue to lag behind inflation, some other economic shifts need to be identified.

The Ontario Federation of Labor says the declining number of large employers and increasing number and proportion of small employers and small workplaces leads to fewer better-paid industrial jobs and more less well paid and insecure jobs.

Labor federation statistics indicate 474,000 full-time jobs were lost in the 1981-83 period, while there was a net increase of 218,000 part-time jobs.

PAYING THE BILL: Moral and ethical arguments alone justify the obligation society has to provide adequately for its citizens. And working wages come back into the economy as purchases of goods and services. The very consumers on whom businesses depend to buy their goods need to be paid sufficient wages to do so.

A few months ago the Ontario government boasted that "over the past half-dozen years Ontario has led the industrialized world in economic growth." Yet, incredibly, minimum wages, while they increased slightly, have been losing ground during those years. Management salaries increased at the same time by up to 40 per cent.

There are undoubtedly some marginal businesses which would be adversely affected by higher wages, but even they may benefit from the increased spending power of better-paid workers.

Those who argue that higher wages will create unemployment, ignore other more important economic factors. Minimum-wage increases in the U.S. have not brought the predicted increase in unemployment.

Arthur Fleming, former U.S. secretary of health, education and welfare, concluded that "other factors such as economic growth, interest rates and inflation have a far more profound impact on employment, than does the minimum wage."

The rationale that "we can't survive economically any other way" has been used to justify slavery, apartheid, unequal wages and other forms of economic injustice. Paying a worker less than a legislated just wage is simply another example of economic injustice. The other economic factor which will undoubtedly affect minimum wage is the Canada-U.S. free-trade agreement.

Competition with manufacturing industries where there is already a low wage scale will come from the U.S. with even lower minimum wages and poor labor legislation.

Kansas and Nebraska have minimum wages less than $2 an hour. Increasingly there will be pressure in Canada to seek competitive advantage by cutting wages or benefits and this will mean more deprivation for working class families.

PROFIT MOTIVE: The market economy asserts that business profit is a priority and workers are hired, fired and paid according to the prevailing profit formula. It argues that a legislated minimum wage leads to workers who will price themselves out of jobs.

In fact, the continuing decline in minimum-wage dollars, as compared to the cost of living, indicates that workers are anything but overpaid.

Work and production serve a social usefulness and the well-being of society is a priority. Consumer and social needs, worker well-being and environmental protection must all be integrated in the economic formula.

Workers are entitled to a fair return for their labor. We are morally obligated to develop an economic formula which recognizes the needs of people as a higher priority than the quest for profits.


Click here for Murray Hopper's
viewpoint on the minimum wage




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