Provincial NDP Leader John Horgan is promising to raise the minimum wage to $15 if his party wins next May’s election. Currently, the rate is set at $10.45 an hour, rising to $10.85 later this year and $11.25 in September 2017.
Horgan has a point. Our current minimum wage is the lowest in Canada.
And blue-collar incomes have stagnated in B.C. Allowing for inflation, working-class families earn little more today than they did three decades ago. They lost ground throughout most of that time.
Moreover, it might be argued that Britain’s vote to leave the EU, and the rise of Donald Trump in the U.S., reflect the same reality. While upper-class earners have enjoyed smooth sailing and have done very well, the bucks stop there. There has been no “trickle down” to less advantaged families.
So Horgan is right to make this an issue in the upcoming election.
Premier Christy Clark will, in all probability, reprise her 2013 campaign slogan — jobs, jobs, jobs. Yet even if she can deliver, that is not enough. Since the 1980s, B.C. has outpaced the rest of Canada in job creation. Specifically, our labour force expanded by nearly 60 per cent over that period.
But more jobs doesn’t mean better jobs, better pay or higher family incomes. And that is exactly the problem. B.C. — and Canada as a whole — have done well enough in creating options for employment.
But we have done a lousy job creating high-quality options. We might be working, but too many of us are working for subsistence-level wages.
Hence Horgan’s proposal. Unfortunately, he is dealing only with the symptoms we see around us, and not the root cause.
Part of the problem is due to the flight of well-paying jobs to India and China — an exodus that will not halt until wage rates equalize. And that is not in sight.
Part is due to robotization — the growing trend toward replacing human workers with automation. That seems likely to expand.
But raising the minimum wage far above any other Canadian jurisdiction — indeed, well above most American states or European nations — is not the answer. It might, if anything, accelerate the flight of jobs to lower-income venues.
Economists disagree about where exactly the line is drawn. But some research suggests that once the minimum wage reaches more than half the median wage, there is a net loss of jobs. That would suggest a ceiling of about $12.85, not $15.
So what is the answer? For a start, the time when completing Grade 12 guaranteed a comfortable living is largely gone. We badly need a more highly trained and better-educated workforce.
Good-paying jobs in the trades, engineering, medicine and technology are going a-begging, or going to imported workers, because we lack those skill sets. And in part, we lack them because the cost of post-secondary education is beyond the reach of lower-income families — a vicious circle.
The place to begin is by ensuring that any high-school graduate who wants to pursue skilled employment can do so. Perhaps that means introducing some form of income-tested bursary that would clear the way for kids from poorer families.
Costly, yes, although many European countries have done it. But what alternatives do we have? The workplace our parents grew up in is gone forever.
Horgan would do well to think more deeply about this issue. Jacking up the minimum wage will no doubt play well with his party’s activist wing.
But it is still, largely, a gesture. Ironically, we need something far more radical.
