Minimum wage increase delayed again

Minimum wage earners in New Brunswick have to wait again for an increase in their pay at a time when taxes for corporations and higher income earners are set to decrease by another 1% and the small business tax is set to drop by 0.5%.

Minimum wage workers will not get the additional 50 cents per hour they were promised would start in September. We are told that these workers will have to wait until next April when hopefully it will finally reach $10 per hour, the average in the Atlantic provinces. From September to April, each full-time worker will hand over $20 to their employer every week.

Employers asked the government to not raise the minimum rate and the government complied. “Minimum wage is not an effective tool for reducing poverty” is how the New Brunswick spokesperson for the Canadian Federation of Independent Business put it, and I am told he they did not mean that as a joke.

How is paying someone less than minimum wage effective in reducing poverty? In what world does it make sense to have jobs that create poverty?

Poverty wages mean not just misery, poor health, less education, more victimization and crime, but also more public spending to deal with the problems caused by poor wages like the ones the New Brunswick government announced a few days after cancelling the minimum wage raise: back-to-school cheques of $100 per child for low-income families, and grants for food banks.

The provincial minimum wage rate has increased a few times in the last few years, but it was only beginning to catch up from decades of neglect. Currently, someone who works full time at minimum wage is paid about $19,760 per year.  You would have to have special circumstances for that to be enough to live above the poverty line. You would also have to be lucky enough to get full-time hours.

As Kurt Peacock of Saint John says about poverty in New Brunswick, in his 2009 report for the Canadian Council on Social Development, “Despite the provincial government’s promotion of work as a remedy to poverty, the actual value of entry-level jobs has barely kept pace with rising costs for energy, housing and food… Recently, the financial rewards of minimum-wage work have improved considerably… Adjusting for inflation, however, a minimum-wage worker in New Brunswick now is earning less now than a minimum-wage worker of 30 years ago.”

Another threatened jab at the working poor is the talk of implementing a two-tiered minimum wage.  The Labour Minister has said the government is entertaining the possibility of a two-tiered minimum wage, which would mean a lower rate for teenagers or for workers who get tips. Exactly how can we justify saying to someone who is qualified for a job that because you are under 18 or 19, or because you’re working in the food service industry, you’ll be paid less?

The 4,200 New Brunswickers who work as food and beverage servers or bartenders–more of them women–earn on average $10,000 per year (the women) or almost $13,000 (the men).  Are we really going to say that is too much? We’ve got to bring down the minimum wage that applies to you? Is that really the best idea we can come up with to improve our economy and our poverty rate?

Keeping minimum wages low is justified through specious arguments that increasing minimum wage leads to job losses but no evidence exists to support such a claim.

It is in all our interest to fight for a minimum wage that ensures a dignified life for all workers.