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Features

February 23, 2016

Fight for a Living Wage!

SS Editorial

Fight for 15

In an era where income inequality and wage polarization are increasing, a fundamental part of the class struggle is to set and improve labour standards for the majority who are not unionized.

In Canada, over one million workers, some 6.7% of the workforce, labour at minimum wages that vary from $10.30 (New Brunswick) to $11.25 (Ontario, where over 11% of the workforce is paid minimum wage) to a high of $12.50 in the NWT). Two thirds of minimum wage workers are women.

According to the bi-annual Canadian Centre for Policy Alternatives (CCPA) study of minimum wages, workers with children need to earn $16-17 an hour to meet minimal security needs – with no allowance for savings.

This wage gap between legislated poverty and survival is why labour federations across Canada have launched the Living Wage for Families’ campaign, with demonstrations and petitions outside low wage employers like Macdonald’s to put pressure on provincial governments to reform minimum wage standards by raising them to above 50% of the median income - to $15 an hour.

However, despite five provinces having raised their minimum wages in 2015, Canada has one of the lowest standards for minimum wages, barely above 40% of the median income. Anti-poverty activists and trade union economists have argued that a 60% median standard is required for basic rental housing, food, childcare, education, and health.

Provincial governments raise the spectre of cost and jobs. What do the facts say? Paying people a living wage supports the economy as over two thirds of all purchasing is driven by household demand. It also saves tax dollars by reducing the demand for expensive services like chronic health interventions and visits to emergency departments where the poor are overrepresented as patients by a two to one margin.

Raising the minimum wage to 60% of the median wage is not a job killer as documented by a CCPA study by Jim Stanford looking at the relation between employment and minimum wages since 1980 to 2012. In fact, minimum wages are so low, Stanford argues, as to have virtually no effect on unemployment.

Some provinces have manipulated their minimum wage rises by increasing rates to $10-11 and then insert an inflation index provision. This is a people killer by blocking reform. With such a low standard, studies to better coordinate anti-poverty services, like BC’s community poverty project in seven communities or Calgary’s ‘Enough for All’, are actually exercises in deflection from the basic issue of providing the poorest workers with enough resources to live.

Who benefits from ‘minimal’ wages? Governments talk about small businesses suffering. Stanford’s study shows the majority of companies who employ minimum wage workers are those with a staff of 100 or more workers. Over 40% of all minimum wage workers are employed by companies with more than 500 workers! These figures don’t include businesses like Walmart which deliberately pay their workers ten cents more than minimum wage to escape being counted as minimum wage employers.

A government could easily design a flexible minimum wage standard to address small employer and regional differences to still meet the 60% median income standard.


Living Wages, Stagnation, or Decline?

Avoiding minimum wage reform is not about protecting jobs, but protecting profits. A minimum wage standard of 40% of median income is another coercive tool to cheapen labour power, like social assistance rates below the poverty line, and fifteen years of wage stagnation for all workers. Since 2000 Canadian productivity has risen by 14%, but wages have risen only by 0.4% in real purchasing power. Productivity gains have gone to the rich in a redistribution of resources to those who need it least.

Can something be done? Municipalities like New Westminster in British Columbia and Cambridge in Southern Ontario have passed living wage policies for their unionized workers and contracted services. VanCity, one of Canada’s largest credit unions, also implemented a living wage policy, which came into effect in 2013 after a two year rollout.

A living wage is not a cure all for endemic poverty, but it would be an important start. And it would be a start to raising the confidence of all workers that better is possible: that we could lift unionization back to the 40% range, where a majority of all workers are positively impacted by union compensation; that union administration and bargaining based on daily membership involvement is possible for such gains; that political structural change, which redistributes wealth from the 1% to the rest of us, is doable.

Fighting for a living wage also offers the independent left a practical avenue of activity. Seattle socialist activist Kshama Sawant’s campaign for a seat on city council was based on building a movement for a living wage. Her electoral victory has brought $15 an hour to Seattle and inspires other northwest campaigns.

Here in Canada, Conservative and Liberal governments have refused meaningful change, but social democratic city councils, co-operatives and credit unions, and higher education institutions, offer a field of activity where wage reform is possible. If groups like Solidarity Halifax, for example, are in a position to contest a municipal seat, a living wage policy can be the basis of a popular challenge to reframe public debate about our society– and to raise the possibility of independent socialist organization.

April 15th is the national day of action for a living wage.