As David Maher’s August 2nd column accurately stated, there has been a renewed debate about the merits of increasing NL’s minimum wage to $15.
Business, with their usual fierce resistance, attribute higher unemployment rates, business failure, and young people working for pocket money as the rationale for keeping workers below the poverty line.
CommonFrontNL claims that raising the minimum wage will benefit workers, especially women, their families, businesses and the economy.
The Newfoundland and Labrador Federation of Labour (NLFL) agrees in the urgency of incrementally increasing Newfoundland and Labrador’s (NL’s) minimum wage to $15.
They believe that reaching $15/hour is only the beginning of a long discussion about what constitutes a living wage in NL.
Furthermore, the NLFL advocates for a complete overhaul of a very outdated “Labour Standards Act”, and will be asking for just that when they meet with the Honourable Bernard Davis.
Here’s what we know:
Wage and gender inequality, poverty, and precarious employment are very real in NL. They are key barriers to economic and social growth. The International Monetary Fund, the Conference Board of Canada, and economists around the world agree.
Economies that have the highest minimum wages in Canada are the same economies that lead in economic and employment growth.
The NLFL was outraged when the already too-low $11.00 minimum wage was increased only to inflation, locking workers into poverty forever.
NL will have the second lowest minimum wage in Canada by year’s end. We already have the highest levels of poverty and the highest health care costs.
There is a direct correlation between poverty and the social determinants of health. We know that poverty also has an impact on education and the justice system, as well as in the mental and physical well-being of citizens.
Almost 13,000 workers in NL earn minimum wage. Sixty-six percent (66%) are women. Half of them are young workers. Most work full time, and 2/3 of them are permanent.
Even more startling is that thirty-three percent (33%) of NL workers (70,000), earn less than $15. Sixty percent (60%) are women over 20, and only fifteen percent (15%) are teens. This is a gender issue and an equality issue.
The biggest payers of minimum wage in NL are companies that employ more than 500 people. For most of them, their profits do not even stay in NL!
There was no drop in the employment rate in 2006 when the minimum wage went to $10, despite all the fears.
Leading causes for business failure have nothing to do with minimum wages. Governments have many options for supporting small business – such as tying business tax to job creation, for example.
Consumers drive fifty-five percent (55%) of the economy. It stands to reason that with more money in peoples’ pockets, more will be spent in the local economy.
Research tells us that low wage workers spend almost all their disposable income in the local economy. For NL, that means $200 million annually into local restaurants, stores and other local businesses, which creates a significant boost to local economies.
A tax credit as a substitute for a minimum wage increase is not the answer. For a full time, minimum wage worker, a $1000 tax credit does nothing to lift them out of poverty. Also, many low wage workers don’t even earn enough to pay taxes, let alone claim a tax credit. More importantly, why should taxpayers subsidize business in this way?
As the economy continues to struggle, perhaps government can look at doing something new and bold; tried and true. A real way forward. Something that brings equality and fairness to the thousands of workers in NL who can’t lift themselves out of poverty.
If we truly want to be the province where people come, live, work and play – then let’s take the lead, and raise minimum wage to $15.00.
Op-Ed from Mary Shortall, President of the Newfoundland & Labrador Federation of Labour