RADIA: Higher wages would cost jobs

Tri-City News
Tri-City News' columnist Andy Radia
— image credit: SUBMITTED PHOTO

As of June 1, Ontario will have a minimum wage of $11, the highest in the country.

As I write, I can already hear the baseless talking points coming from my colleague opposite: B.C. should be raising its wage even higher. How can people in Vancouver live on a wage of $10.25 an hour? Give the money to workers who can help buoy the economy.

With all due respect, those are all red-herring arguments.

First, there really aren’t many people in this province earning minimum wage: According to Statistics Canada, only 7.2% of workers, or 136,000 British Columbians, earn a wage of $10.25 per hour.

Moreover, a lot of minimum wage earners in this province are students, newcomers to Canada and those who lack any real work experience. Increase the minimum wage and they may not have jobs anymore.

The term “living wage” is also bandied about these days.

Essentially, it is what it sounds like: a wage for the working poor that ensures one’s basic living expenses — food, clothing, shelter, transportation and childcare — can be met. The wage varies depending on the cost of living in your region; in Vancouver, for example, left-leaning groups have pegged the living wage at $19.62/hour.

But the Fraser Institute’s Charles Lammam says this is a foolhardy policy that can result in some unintended consequences.

“When governments try to legislate wages, there’s typically a trade-off. While some workers may benefit from a higher wage, their gain comes at the expense of others who lose as a result of fewer employment opportunities,” Lammam wrote in a recent report about living wages. “Employers respond to living wage laws by cutting back on jobs, hours and on-the-job training.”

Certainly we shouldn’t ignore the number of people living in poverty.

Governments can and should be at the forefront of making higher education more attainable, of matching job shortages with the unemployed and for facilitating a strong economy so demand for workers puts a natural pressure on wages.

But individuals have a role to play, too: by making better choices, by putting off having children, by becoming fluent in English and by proactively pursuing education opportunities.

That’s the way to increase wages, not by forcing small businesses to increase expenditures they can’t afford.


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