2006/07/14

Minimum wage hike in New Brunswick is still not enough professor says

Chris Arsenault
The Dominion, Canada

On July 1, the minimum wage in New Brunswick increased 20 cents to $6.70 per hour, an adjustment UNB professor Thom Workman calls "political tokenism." "It isn't at all significant, 20 cents doesn't go far enough to turn the minimum wage into a living wage," said Dr. Workman, a political science professor who specializes in Atlantic Canadian wage policy. He thinks living standards for the lower echelons of New Brunswick society have stagnated or even decreased over the past 30 years.

"Had increases been pegged to the rate of inflation from the 1970s onward, the minimum wage would take low income individuals and families at least above the poverty line," said Dr. Workman.

Based on research from 2001, Workman thinks the minimum wage should be around $9 an hour, if it had kept pace with post 1970s inflation.

The Conservatives, however, are patting themselves on the back. "I am very pleased that government continues to follow through on addressing the minimum wage," said Post-Secondary Education and Training Minister Jody Carr, when he announced the changes.

A full-time person working for the new minimum wage earns roughly $13,400 per year before deductions, barley enough to support a single person, let alone a family.

"This [increase] will benefit thousands of New Brunswick workers while respecting the needs of employers in the province," said Carr.

The question then is: do employers need a perpetual under-class?

"This is a recognition by business owners that the cost of living is higher," said Fredericton Chamber of Commerce spokesperson Anthony Knight.

If business owners are recognizing the cost of living is increasing, would they accept a $9 minimum wage, allowing workers the same standard of dignity they received 30 years ago, before inflationary roll backs ate into their real income?

"I think we'd need to have an open dialogue with government and business leaders to have such a dramatic increase," said Mr. Knight.

Some business interests argue that raising the minimum wage could eliminate jobs because employers would leave in search of cheaper workers. After all, when it comes to cheap labour, New Brunswick has what economists call a 'comparative advantage' over other parts of the country.

"The idea that the minimum wage can't go higher or it will decrease employment is a bald face lie.

“The minimum wage is largely in the service sector," said Dr. Workman.

"Where is Tim Horton's going to move to? The service industry isn't moving." The province plans to raise the minimum wage again in July 2007, to $7.10 per hour but that may not even keep up with inflation, especially with rising gas and home heating costs.

The minimum wage rate also influences other wages at the lower end of the economic spectrum.

"For a lot of workers, the minimum wage is a bench mark," said Workman. "In 2001, 25 per cent of all wage earners in New Brunswick were working within $2.50 of the minimum wage, which is why food bank use is high and our poverty rates are high." Low wages equal more than just economic poverty. If money is power, and power is influence, then a sizable portion of the population don't have much of a voice.

While interviewing a half dozen groups and individuals for this story, not a single person could provide contact information for someone currently working for minimum wage.

"I know people, but they wouldn't talk to you," said Penny Alberts, a St. John-based activist deemed the 'Howard Stern of the anti-poverty movement', by one commentator. "There is a real stigma attached to earning low wages and being poor. And people I know wouldn't want to give their names," she said.

While legislated minimum wages are higher in other provinces, $7.55 in Saskatchewan, $7.15 in Nova Scotia and $8 in B.C., the purchasing power of minimum wage is generally stagnating or decreasing across the country, while poverty and inequality rates increase.

An internationally cited 2005 study by Social Watch, a coalition of 400 non-government organizations from 50 countries, found that poverty in Canada is rising among children and new immigrants, the middle class is finding it increasingly difficult to afford education and housing, and 250,000 Canadians are homeless and living on the streets. According to the study's author, economist Armine Yalnizyan, "We [Canadians] are worse off now than we were when we wrote the 1948 declaration of human rights."

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