Minimum wage dream
author: jacob nelson | staff writer
So, Ontario will be following Alberta in implementing a new minimum wage of $15. This is great, right?
So, Ontario will be following Alberta in implementing a new minimum wage of $15. This is great, right? For so long it seems like those working at minimum wage have been living at a serious disadvantage. In my lifetime, I cannot recall a moment where the minimum wage made sense in Saskatchewan, and now it seems like provinces are hopping on board the $15-per-hour train and helping the little guy.
Well, the older I get and the more I start to think about how the economy works, I realize that it might not be all that great. If Saskatchewan were to increase the minimum wage, that would put around $600 more gross income in the minimum wage worker’s pocket per month. And a lot of people are going to argue that the extra $600 is going to do wonders for everyone, but I’m not so sure about that. Let’s first look at another country that has implemented a similar style of minimum wage and how well it works.
Australia is known as having “the best” minimum wage on the planet. There, fast food workers make close to $20 (US) per hour, and because of this, they have one of the highest middle-class populations in the world. In an article written by Luke Ryan for Quartz, he states that around 66 per cent of Australia is considered “middle class” (compared to the U.S. at 38 per cent). This means that most of the country lives in a much more equal state, with everyone being able to afford the bare minimum. However, this can’t necessarily be credited to the minimum wage being so high. Ever since the minimum wage was changed, Australia’s poverty line still sits around where it always has, at 14 per cent of the population. So, does this mean that it is, in fact, not the strong minimum wage, but instead other factors that are to be credited for this happy economy? Maybe, because Australia is also strong in their low-income tax breaks. However, this is just one example.
It is not necessarily good to look at other countries to predict the outcomes of our policies. They are different in many ways, from the top of their political hierarchy all the way down the societal norms in which they live. Sure, many fighting for the minimum wage could look at our Scandinavian neighbors, for example, and shine a light on their impenetrable economies, but what most don’t understand is that countries like Denmark don’t actually have a national minimum wage. Most of those countries run on social democratic policies that our society does not want. The people of Denmark live extremely happy lifestyles not because of what they have or own to themselves, but because of the happiness of society of a whole. High materialism is almost unheard of and, therefore, doesn’t bring negative impact to Denmark. It is a collaboration of unions and other forms of groups that promote proper policies and securities for everyone to live a lifestyle suited to their needs.
People will continue to point at countries like Australia and Denmark and tell you that a high minimum wage is the reason their citizens are doing so well, but it’s not that simple. A very good piece written by Tim Worstall, a contributor to Forbes, goes into detail about the true minimum wages of these countries. Tim states, “if we want to compare wages, we need to compare what they will actually buy”. The cost of things in other countries don’t equal the same cost in the U.S. He found that what people are stating as a $16 minimum wage is actually around only $12 in the States. Using the same formulas, he found that Australia is around $11, not $15. But what does this mean? It means that these countries are boasting a strong middle-class with an average minimum wage, and that’s because they have proper policies and social safety nets in place to support their population.
Okay, I’m done talking about everyone else – let’s talk about Canada. For the most part, our quality of life is high. A lot of us are happy, and thankfully some of us want to see even more people happy. I commend these people, because they are showing they have big hearts. If we were to standardize minimum wage at $15 an hour, a lot of people will live better lifestyles for sure – in the short term. The reality is that once people start earning a higher income it’s going to have a lasting impact. We will see many small businesses doing several things. First, they could start raising the prices of their own services due to the higher cost of wages. This, in turn, makes lifestyles more expensive for anyone not receiving raises (because they are not on minimum wage). Second, they could start cutting their staff to save money, thus leaving a higher percentage of the population unemployed. And lastly, they might decide to stop operations altogether, leaving the population without the variety of goods and service that small businesses provide.
I wanted to finish this piece with small businesses on purpose. Because the real question is “do we want this in Saskatchewan?” Small businesses are a large portion of our economy, almost a third of our GDP, to be exact. So if it were up to me, I would say let’s focus on areas such as taxation and social securities before we move on to wage, for our province’s sake.