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.
Actually, 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.
Take 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.
For 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.