Albertans hear the same old same old as fast-food restaurant owners grow hysterical over minimum wage

Posted on July 04, 2016, 1:22 am
11 mins

PHOTOS: Alberta Labour Minister Christina Gray, who is sticking to her guns on the provincial government’s plans to raise the provincial minimum wage to $15 by 2018. Below: Notable fair wage campaigners, Joe Ceci, finance minister of Alberta; Franklin Delano Roosevelt, president of the United States; and Karl Marx, philosopher, economist and journalist.

Fast-food restaurant owners in Alberta continue to screech that a $15-per-hour minimum wage will put them out of business or, failing that, force them to lay off workers.

With Alberta’s economy in a low spot thanks to the improvidence of previous governments and the price of oil on world markets, they are ratcheting up pressure on the NDP government not to keep this particular promise, “given the province’s current economic climate,” as media never fails to remind us.

JoeCeciActually, the government isn’t talking about raising the minimum wage to $15 just yet, rather, by $1 an hour to $12.20 next October – and eventually to $15 by October 2018. Labour Minister Christina Gray is sticking to her principles, and her government’s plans, and will also eliminate the previous government’s ridiculous liquor-server differential, which paid servers less on the dubious theory intoxicated customers tip more.

The horror! In the town where I live, a local restaurant owner sternly warns that if wages for waiters rise, those of cooks will have to fall. No explanation is offered for this theory. He also says higher wages will mean lower tips and therefore higher taxes – apparently forgetting that all income is supposed to be declared.

The president of the local Chamber of Commerce says she is “in a state of disbelief.” (This, at least, makes sense, as it is the first time in many Albertans’ adult lives a government didn’t automatically do whatever the business community demanded.)

Restaurants Canada has launched a campaign demanding Alberta delay raising the hourly wage until the economy improves. Later, of course, when it improves, they will demand delays for other reasons.

Amber Ruddy, Alberta spokesperson for the Canadian Federation of Independent Business darkly prophesies that if the minimum wage hits $15, Alberta businesses “will close their doors.”

If this all sounds familiar to you, it should.

FDRTake Restaurants Canada. This lobby group got its start fighting the Mackenzie King Government’s menu-price controls when the war against Nazi Germany, to which many Canadians were sacrificing their lives, started to cut into profits.

Along with the CIFB, the Conservative and Wildrose parties, “think tanks” like the Fraser Institute and the owners of our local burger shacks were fighting to keep Alberta’s minimum wage as low as possible back when the economy was booming too.

And just two years ago, the very same people were lecturing us on their absolutely essential need for access to an unlimited supply of low-wage and compliant temporary foreign workers. Without TFWs, we were solemnly admonished, prices were bound to rise, service would be cut (no burgers between 2 and 5 a.m.) and businesses would close.

Did any of this ever happen? Nope. Not a single business in Alberta ever closed because of a lack of TFWs.

As for the minimum wage, they’ve been saying the same things about higher wages at least since the middle of the 19th Century!

Back in June of 1865, barely a month after the end of the American Civil War, Karl Marx himself took time out from his busy schedule fomenting international communist revolution to write a pamphlet debunking exactly the same claims about higher worker wages as restaurant owners are making today in cities, towns and villages across Canada. Indeed, from the vantage of 2016, it’s amusing to read Value, Price and Profit because the author’s summary of arguments against higher wages sounds to up-to-date and familiar.

KarlMarxFor well over a century, meanwhile, a parade of iconic figures on the right have predicted civilization’s doom as a result of higher wages – and every one of them has proved to be wrong.

The preponderance of evidence, wrote economics columnist John Cassidy in a useful New Yorker piece in 2013, shows minimum wages in North America are low by historical standards, that there are no obvious links between rising minimum wages and unemployment, and that the potential costs of raising minimum wages are small.

Mainstream economists are not unanimous in saying the same thing, but they are pretty close. “Based on the literature as a whole, we shouldn’t expect there to be any kind of large negative employment effects of this change,” University of Calgary economist Trevor Tombe said last week. “If there are any job losses, they’re likely to be modest.”

Indeed, there’s a strong case to be made that higher minimum wages actually help local businesses, since recipients tend to spend their money on essentials in their home communities. They’re not buying BMWs made in Germany. As a result, higher pay for low-wage workers can usually be counted on to stimulate economic growth and business success in those communities.

A higher minimum wage also reduces income inequality, increases local tax income without requiring higher taxes and cuts training and recruitment costs for local businesses – all factors that counter the increased cost of higher wages to employers.

Plus, of course, it puts the burden of ensuring workers are profitably paid where it belongs: on the profitable businesses who benefit from the society of laws in which we live. Business lobby groups, for some reason, argue there is a social benefit in allowing them to pocket handsome profits based on their employees’ hard work and then shove the costs of guaranteeing them a decent life onto taxpayers through welfare, subsidized housing and food banks.

Now, I recognize quoting an ancient pamphlet by Karl Marx of all people is a risky proposition in 2016, when we have all been thoroughly indoctrinated against him.

So I’m standing by for social media hysterics – although maybe I ought not to worry, seeing as the Wildrose Party’s finance critic seems to think socialism was invented in 1917 and uses a photo of a 1930s breadline in capitalist New York City to make his dubious point! Marx published the first part of Capital, for those of you who keep track of these things, in 1867, the year of Canada’s Confederation.

But the evidence ever since suggests Marx had it right when he concluded Value, Price and Profit with the observation that “a general rise in the rate of wages would result in a fall of the general rate of profit, but, broadly speaking, not affect the prices of commodities.”

It would be safer on the topic of minimum wages, I suppose, to quote Franklin Delano Roosevelt, the U.S. President credited in some quarters with saving capitalism, not with the German philosopher who theorized about its future.

But in his 1938 Fireside Chat, FDR sounded like more of a rip-roaring firebrand than Karl Marx!

“Do not let any calamity-howling executive with an income of $1,000 a day, who has been turning his employees over to the Government relief rolls in order to preserve his company’s undistributed reserves, tell you – using his stockholders’ money to pay the postage for his personal opinions – tell you that a wage of $11 a week is going to have a disastrous effect on all American industry.”

Of course, calamity-howling executives are paid a lot more than $1,000 a day nowadays.

Or, we could just quote Alberta Finance Minister Joe Ceci, who quietly noted in June 2015 that “a person working a full-time job shouldn’t still be poor. They should be lifted out of poverty. You can’t do that on $10.20 an hour.”

You can’t do it on $11.20 an hour either, it needs to be said.

The disasters predicted by the restaurant industry in Alberta in the face of a minimum wage that is higher – although not high enough – will never happen.

The worst that will occur is that the price of a burger will go up 50 cents or a dollar, or a restaurateur’s profit will decline slightly.

The pressure from this lobby will not relent, however, and their tall tales will grow ever taller, because they know it will be politically difficult for any government to lower the minimum wage after 2015, especially if, as is likely, Alberta’s economy returns to significant growth.

The NDP is doing the right thing. In our own communities, we can help by patronizing any restaurant that states publicly it pays its employees $15 an hour now.

This post also appears on Rabble.ca.

13 Comments to: Albertans hear the same old same old as fast-food restaurant owners grow hysterical over minimum wage

  1. July 4th, 2016

    Two more looks from The Tyee.

    Don’t Believe Claims $15 Minimum Wage Will Cost Jobs
    Both research and BC experience support NDP’s plan to boost it over four years.
    by Paul Willcocks, The Tyee
    http://www.thetyee.ca/Opinion/2016/06/30/15-Dollar-Minimum-Wage/

    Temporary Foreign Worker Review Is Skewed, Says Alberta Labour Leader
    Gil McGowan says majority of voices testifying in Ottawa want controversial program expanded.
    by Jeremy J. Nuttall, TheTyee
    http://www.thetyee.ca/News/2016/07/04/Temporary-Foreign-Worker-Review/

    Reply
  2. TENET

    July 4th, 2016

    They prey on the poor, they serve highly processed stuff that has virtually no nutritional value, their wrappers and convenience packaging litters fences, yards, tree lines everywhere, their drive-tru lines are full of idling vehicles (often on company time), they hire school kids and working poor and treat them like assembly line robots…

    And restauranteurs that must pay starvation wages? Get it right or get a fast food franchise.

    If “they” think they will get any sympathy from me, they better wake up and smell their own coffee.

    Reply
  3. Sam Gunsch

    July 4th, 2016

    Adam Smith, an economist beloved by our business and political class on the right, had this to say about wages, profits, and merchants:

    ‘Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.’

    Chapter IX, p. 117.
    The Theory of Moral Sentiments (1759)

    https://en.wikiquote.org/wiki/Adam_Smith

    =================

    Amazing success of business propaganda that Smith’s only known for his ‘ invisible hand’ metaphor.

    When, if the body of his work were to be publicized, he might just as well be known for these sorts of commentary on politics and morality:

    ‘ “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

    ― Adam Smith, The Wealth of Nations ‘

    http://www.goodreads.com/quotes/420123-people-of-the-same-trade-seldom-meet-together-even-for
    \

    Reply
  4. Dave

    July 4th, 2016

    The gloom and doom machine will always holler against anything that helps their workers.

    A minimum wage increase raises the buying power of the lowest paid people. These people spend 95% of their money within a few miles of where they work or live. So what goes around comes around.

    The whole idea of capitalism is to make a profit off the labour of others who work at their business. But they cry for propaganda purposes only because they will quickly raise the prices they charge and not a peep will be heard about the impact this will have on customers buying power. When your costs increase – cry – when your prices increase – stony silence.

    Reply
    • Athabascan

      July 4th, 2016

      To those greedy bastards, I say steal less from your business and you’ll be able to show more profits (at least officially on paper). But that’s not what they want to do is it?

      Reply
  5. David

    July 4th, 2016

    I find it interesting that those that seem to howl most about the minimum wage going up generally have a very comfortable living. Their economic reality is very different from those making the minimum wage and I doubt they could even imagine trying to live on the minimum wage. Perhaps they may have to defer buying their next BMW or Mercedes a bit in order to pay their employees a bit more, but if that means that someone working full time or part time doesn’t have to go to the food bank, I think on whole that is a good thing.

    I wish the top 1% or 5% would be more concerned about the welfare of others and not just their own narrow economic interests, which they try to pretend is congruent with everyone else’s. The world will not come to an end if some fast food places have to raise their prices a bit or not stay open 24 hours.

    Reply
  6. Dave

    July 4th, 2016

    Amazingly from 1971 when the minimum wage was about $1.50 to 2014 when it rose to about $10.00 all while the PCz were in power there was not much concern about jacking it up but now that the NDP is raising it all he’ll breaks loose. Last year when the credit rating private businesses were lowering Alberta’s credit rating the right wing rage machine went nuts over it. Now this year they lowered Saskatchewan’s rating go through same level as Alberta’s and not a peep from the rage machine. Only when a left leaning does it do they go bonkers.

    Reply
  7. 9 Sided

    July 4th, 2016

    Let’s not forget how we already subsidize the hospitality industry. Hosting events like the World Petroleum Congress or any generic exhibition like the Stampede costs a lot in terms of security and police presence. Bidding on Olympic and similar games costs a ton. I’m not saying we shouldn’t have these events but let’s get real about who pays the cost (wage earners) and who reaps the most benefit (hospitality industry). Think about that the next time you hear someone bitching that business tax is too high in Calgary.

    Reply
  8. Athabascan

    July 4th, 2016

    I agree with David above.

    The first question I always ask when someone objects to a hike in minimum wage is: How much money do you earn per hour?

    For those who object to improvements in the CPP I ask: How much pension will you get when you turn 60 or 65?

    I find it particularly interesting that objectors to CPP enhancements, and minimum wage hike, tend to be those who are well off. Why do they want others who are suffering to continue to live in misery?

    What is it with rich people who feel they never have enough? Why do they constantly want to punish the poor?

    Reply
  9. Chris

    July 4th, 2016

    There won’t be one fast food employee left once the NDP is done with them.

    Reply
    • Athabascan

      July 5th, 2016

      The horror. I guess you’ll have to make your own hamburgers or pizzas Chris.

      Maybe the world would be a better place without fast food. People would be healthier and we could probably save a lot on health care as a result.

      Reply
  10. Dave

    July 6th, 2016

    It seems like those with more than enough money always like to pounce on any effort to give a living wage to those who work but are in poverty, but also say nothing when businesses make huge profits.

    Reply

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