What's missing in the debate over Ontario's minimum wage - Macleans.ca
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What’s missing in the debate over Ontario’s minimum wage

Opinion: Political debates are fundamentally about how we want to live together—and if we ignore the human element, we threaten our democracy


 

(Photo by Roberto Machado Noa/LightRocket via Getty Images)

This month, the government of Ontario raised the minimum wage to $14 an hour, up from $11.60. Wages will rise again, to $15, in January 2019. The Liberal government announced the changes months ago and immediately provoked a debate over how much workers should be paid, how much businesses can afford to pay them, and whether the policy itself was effective at redistributing income or, at least, helping vulnerable workers make ends meet. This week, the debate was given a couple of faces and names when the owners of two Tim Hortons coffee shops in Cobourg sent their employees a letter informing them that they would be passing along the increased operating costs. Paid breaks were done for. Employees were now required to pay half of the cost of their medical and health benefits.

The move by Ron Joyce Jr. and Jeri Horton-Joyce, the owners, became a flashpoint. Two restaurants do not a revolution-in-waiting make, nor are they necessarily a harbinger of what is to come from other business. But there was symbolism at work: This was two wealthy bosses sending a cold, semi-apologetic letter to their minimum wage employees, informing them of an effective pay cut—from their winter home in Florida. It had a rather “Let them eat Timbits” air to it. More to the point, the letter brought the debate’s human element—and thus its political element—into plain sight.

That was appropriate. The minimum wage debate is first and foremost about human beings. It is a debate about what we owe one another, what we expect from one another, what we value about one another and how much we value it, and what we are okay taking from and doing to one another. These questions comprise the moral or ethical bit of what is sometimes imagined as merely a technical debate about which levers to pull or buttons to push to make the free market work—cold conversations about the economy, just the facts. But debates about economic policy are political debates. They are bound up in social relations, which is to say, relations of power and authority.

MORE: In a fight over minimum wage at Tim’s, the worker loses

The late Marxist historian Ellen Meiksins Wood reminds us that at some point in our history we separated the “economic” and “political” spheres from one another. We granted the former, as capitalism, special status as untouchable received wisdom—and then we forgot that we’d done so. It all became rather obvious to us that this was the ways things were and the way things should be. But the economic sphere is political, not just technical, or worse, an extension of natural philosophy.

We cannot and should not try to separate economic expertise—theories, models, evidence, facts, and figures—from the debate about the minimum wage. But in a democracy in which we have scarce resources to divide and in which we disagree about who the experts are, what the theories, models, evidence, facts, and figures imply, and what we ought to do, there is no right, wrong, good, bad, accurate, inaccurate, or anything before the political process by which we decide what we agree on and how we want to live together. As my former doctoral supervisor, Mark E. Warren, would put it: “science has no pre-political authority.” No matter what the external status of facts and trust—what experts say, what data suggests—political discussion and debate are how we establish our shared reality.

So, public debates, to begin, include two important sorts of considerations. First, there’s values, morality, and ethics, which we must consider when deciding on public policy if we want outcomes to reflect our preferences. And second, there’s expertise or technical knowledge, which we must consider if we want to produce effective policy that achieves the things we want. But each of those considerations takes place in the real world of politics.

MORE: Why a $15 minimum wage is good for business

There’s a third bit of public policy debate we must keep in mind: politics. Sometimes, political reality places constraints on what is possible despite what the “best” policy may be. Perhaps a guaranteed income is a better way to redistribute wealth than a minimum wage increase. But what if we can’t get a guaranteed income? Limits to political capital, public appetite for that sort of change, and other issues can make the “second-best” policy the right choice in some cases. In fact, this happens all the time; indeed, often, we’d be lucky to get second-best.

Economies exist to serve people. The people we talk about when discussing the minimum wage aren’t mere abstract units of analysis. They have agency, they have dignity, they have a right to self-govern. On top of that, the market system we live in is neither natural nor the perfect and spontaneous effect of “the invisible hand.” The market is a space of power, not some abstract, neutral platform, and sometimes what we as a people want or need comes into conflict with the economic orthodoxy that assumes otherwise. When it does, we have a right to decide to re-evaluate our priorities, challenge the experts and the data, and proceed to get the best policy possible.

Not all values are or should be established and measured through a single lens. When we forget that—when we treat debates as merely abstract or technical problems to solve rather than as moral or ethical challenges to manage in the real world of politics—we undermine our democratic authority as a people. When we do that, we further cede our collective right to self-govern to technocrats and organized interests.

Our debate over how little a business can pay a worker is a debate about how we want to live together. It includes questions about what our values are, how we should organize our economy, how we expect markets will respond to changes, and how the political realities on the ground enable or constrain action. If we forget that there are layers to this debate, we risk forgetting one of the central purposes of democracy: protecting the dignity and equality of each citizen by letting the people decide how they wish to live together, whatever form that might take, based on whichever considerations they decide matter most to them.

MORE ABOUT MINIMUM WAGE:


 

What’s missing in the debate over Ontario’s minimum wage

  1. Same thing that was wrong when all this started..

    You can’t blackmail businesses into higher wages.

    This is the last step before robots are serving your coffee.

    • I agree. I went to a McDonald’s at lunch today. They used to have four people behind the counter taking orders and now they have just one. The disappeared three have been replaced by self order screens. I read that there were 10% of McDonald’s testing these screens as an option if Ontario and other provinces and countries in Europe started forcing higher minimum wages into the marketplace. Goodbye McDonald employees.
      For the Tim Horton’s franchisees who took the action noted in the article, there is nothing said about what the big issue is there. As a franchisee, they are only allowed to charge the prices for their products that are set by the company that owns all of the Tim Horton’s properties. And that company has said it is not planning to increase those established prices. If the franchisee has 10 employees behind the counter and operates 12 hours each day, the added cost due to the minimum wage hike is about $130,000 per year. How would the author or the P.M.like that amount to disappear from their pay cheques?

      • Tim Hortons…..and all their ilk, don’t even require literacy much less skills and education .

        • And what has that got to do with the franchisee’s salary being reduced by $130,000?
          And somehow, each franchisee had $1 million to invest in the Horton’s franchise or the wherewithal to get that size of loan. Cause that’s what an average Horton’s franchise costs.

      • I think Ms. Wynne has already demonstrated her inability to perform basic math.

  2. These were not minimum wage employees, the average rate of pay was upwards of $13.00. Making it even worse!

  3. How is it that Mr Moscrop knows that the owners of the Coburg Tim Hortons franchises are wealthy? Is he beginning his rant with an assumption?
    .
    He does have a point that we have the right to determine how we will live together. He seems to have missed the fact that we have decided together that a capitalist basis with strong social programs is the generally agreed social contract in Canada. Part of that social contract requires investment in businesses and that investment is predicated on a consistent business environment. Cost increases for a major component of most businesses that increase by 20-30% in the span of a few years is not a consistent business environment. In such an environment it should be expected that significant changes will occur until an equilibrium is again found. Some will look to scale back benefits. They may lose workers or lose business – that will be seen. Some will look to increase prices. They may lose business and lay off workers – that will be seen. In the interim, the minimum wage workers will feel this disruption just as much as the business owners. Anyone who thought it would be different has not been paying attention.

    • Given that Tim Hortons franchises are locked into contracts that don’t allow them to pass increased cost on to customers by raising prices, what does Moscrop expect them to do? Close their doors? That would be quite a benefit to their employees wouldn’t it?

  4. This isn’t a debate about what “we” owe each other. It’s what “they” owe each other – the “wealthy owners” that you highlight. It’s very easy to spend someone else’s money. There’s no discussion about what the franchisees had to sacrifice to buy the franchise, how leveraged they might be, or what will happen if they go under.

    And although it’s nice to believe that Wynne is concerned about us as humans, this is about votes. She is buying votes at the expense of business owners. This will trigger bankruptcies and layoffs. She will be responsible for Ontario’s next recession.

  5. I want to thank the author for his analysis, and would like to reply in kind. It is refreshing to see an article that speaks to greater principles and doesn’t spout the usual cant and ideology.

    First I would disagree with one of his premises. There is definitely better and worse before political systems unless one argues that humanity has never been free of them. Slavery, pain and hunger are bad. Freedom, love and a full stomach are good at its most basic.

    Political systems should have the objective of providing the latter and not inflicting the former, though of course the tactics and objectives can certainly be argued. Therefore the debate over politics is inevitably constrained within the boundaries of the what is the best strategy of achieving the common good. The fight always starts over what is the common good and goes on to the best way of achieving it.

    I have never seen a rational debate about what the best achievable state of human affairs looks like. A debate that takes into consideration the capricious nature of humanity and the fact that we are not all created equal. Some are smarter, some can sing, some work harder, some can roll their r’s (we should definitely get rid of these as they seem to take great delight in taunting me with this talent), etc. We need to encourage talented people to use their talents, to the benefit of all. I would also argue that those that are less talented also need to contribute. No one should ride for free unless they are one of the unfortunate who have no ability to do so.

    Sam Harris, a man renowned for his rationality, wrote a book on this topic where he advocates that there is no one right answer, that there are many ways of a society rising to the highest peaks of morality and many ways of descending into the hellish valleys. I tend to think this is true though I admit that my biases make most of what I can envision conservative in nature.

    I also tend to think that mankind is too preoccupied with self for us to make significant strides to the peaks. This is manifest on all sides of the political spectrum, but at the moment I see it as more prevalent in the PC culture of the left.

    To get back to the subject at hand, I believe a minimum wage actually hurts the most disadvantaged as it takes away the lowest rung of the economic ladder. No one is going to hire a person with little education, who speaks broken English and who has no experience at $15/hour. They can’t possible provide an economic benefit to their employer commensurate with that wage. They have no starting point and it is illegal to hire them for less.

    It seems to me that the author is making the argument that perfect is the enemy of good and that this is at least good. I’m not so sure. I am a libertarian at heart and believe that enabling freedom, including economic freedom is the greatest good. And this inhibits it for a dubious result.

    Sorry for the long post, but I felt the author deserved a thoughtful response.

  6. A close examination of the Financial Accountability Office (FAO) report indicates that the minimum wage hike will be far from a “looming disaster”. According to the FAO, the wage hike to $15 per hour will directly result in pay increases for 1.6 million Ontarians, an impact that positively affects 22% of the workforce.

    As for the dis-employment effects equivalent to 50,000 jobs over an unstated time for a small cohort of young people, even if this should turn out to be the case, remedial programs could be implemented to address this particular issue.

    In that way, Ontario would still receive the considerable benefits of the minimum wage increase – happier and more productive employees, reduced turnover and associated training costs, and a general reduction in income and gender inequality that will result in a healthier and more stable society.

    • Larry, I would say that more money does not usually drive productivity and engagement.
      Not that I have seen anyhow. Your assessment sounds like pure theory. I worked 30 yrs for a major unionized corp (as a worker and management) that had awesome pay and benefits. Sadly, it produced a disturbing number of people who can best be described as entitled and mediocre. It was not the utopia you describe. Even in my own business, and it pays better than 15/hr, I have not seen evidence to support your claims…

    • Lot of care you have for that “small cohort of young people”. Basically ‘we’ll create another solution for a problem we’ve created’.

      You’ve also failed to take into account;
      1. Decrease in hours
      2. Decrease in benefits ( as the article points out)
      3. Higher rate of tax causing a net less after tax.
      4. Higher prices for goods and services. Some may make more money but it will be able to purchase less goods because of the raise in prices.

      It won’t be a disaster just less:
      Less hours, jobs, and ironically value

  7. As a business owner, I find it offensive for others (who know nothing of my affairs and my business) to comment or dictate how much I should earn or pay my staff. It’s Canada, not Cuba. I pay my staff well above 15/hr because they earn it. One’s that don’t, don’t work for me. I have been told many things, but what I have experienced first hand is that there are many out there who lack the skills or ability to merit the old min wage, let alone 15/hr. Since popular opinion would have it that everyone out there is awesome, a victim and are entitled a bigger share of your money, it’s pretty easy to forget that there are always two sides to every story and often more than one truth. While highlighting concern for areas that may be an issue is not necessarily bad, the broad brush crusades and legislation toward righting the perceived wrongs has only made things worse. From my view, it’s polarised a large number of people into opposing camps, all the while lining the pockets of the real winners, the tax people. Forcing people to pay an inflated price for goods or services of a lesser value is just plain socialist and in some cases, illegal (like bread).

    • Employers, like you apparently, that treat employees like commodities rather than resources, should not engage in humanist discussions. Sadly, it’s a common meme for employers to take no active interest in developing capability in their employees. As long as you regard employees as commodity, they will respond in kind.

      • Interesting comment. I admit I did not go through all the effort and expense to run a business, just so I could make friends and help the needy. That said, do you honestly think most employees see their employers any differently? I wont pretend to take the moral high road here and I wont pretend that I’m right, but what I know from experience is that running a successful business is not about doing good deeds and losing money, that’s charity. They need to be separate. Also, it was never my intent to have a “humanist” discussion. I merely wanted to point out that those who impose their views (sometimes forcibly) on other’s affairs without really knowing anything about them, is not a good thing. Each situation is different and we should respect that.

        • You are right Skeptica. You focus on running your business as you should. Meanwhile the elected government has the right to set the rules. They have established a minimum wage. You will now pass on the costs or you will eat them or you will do a bit of both and try to make ends meet. Everyone will do the same and we will see what happens. Australia has a minimum wage and has had one for a long time. They match or beat us in every macroeconomic indicator you might care to look at. It is perfectly possible that the long term impact will be a small transfer of market power from upper to the lower rungs.

          • Ontario has had a minimum wage since 1970. The difference now is that it will increase more than 20% overnight. Imagine if one of your major household expenses increased 20% overnight. say your rent or your grocery bill (or both). It would have a major impact on your life

  8. I own two businesses in Australia and pay the minimum wage which equates to almost $18.00, which when topped up with all the additional costs of public holidays, sick leave, etc., is 25% higher, plus superannuation (retirement plan) of 10%, which equates to an employment cost of almost $25.00 per hour. Are the low paid workers in Australia better off? Probably not. Housing is more expensive, electricity is more expensive, dining out is expensive, and full time employment is difficult to get. When you look at the unemployment rate, I believe in Australia you are considered employed if you have worked for at least one paid hour within the month, so it is not easy to compare by the published unemployment rate. A recent study of the effect of the increase minimum wage in Seattle showed the minimum wage earners actually earned less income, as a result of reduced hours of work. Economics will dictate how much customers will spend on goods and services, and businesses will cut hours, cut staff, and reduce costs in other ways in order to preserve their investments, and perhaps make an income. My son operates a coffee shop in Toronto, which we started 18 months ago. We have just started to break even, now with the increased wage cost we will be losing money again. We have raised our prices, and we will review our operating hours and staffing, and are expecting to cut back on staff hours. If that does not succeed in producing a profit, ultimately the business will be closed and the staff and my son will be unemployed. It sounds good paying everyone 21% more, but where does the money come from?

    • Come on Paul. Australia’s unemployment rate is and has been lower than ours over the last 50 years. If the minimum wage was so darned bad, Australia should have lots more unemployment than us. They don’t. Presents a bit of a problem for your argument, I would say.

      • Would you consider yourself fully employed if paid for one hour in a month? Perhaps this is why Australia’s unemployment rate is lower? Unless you establish a synchronized definition of unemployment any comparison between jurisdictions is meaningless. It appears the consensus is that jobs will be lost. Those most affected with job losses will be the young unskilled person, the group this wage increase is supposed to help. At least in Australia there are junior wage rates which allows students to get a job and learn some skills before the full minimum wage kicks in.

  9. “in a democracy in which we have scarce resources to divide” – that’s a falsehood: the majority of us have more than enough which suggests that the total available wealth is in surplus; the fact that around 14% live below the poverty line is a matter of distribution. A common argument is that the aggregation of wealth is an enabler of job creation – the argument against employment standards is contradictory to this argument. Minimum wage is a tide that floats all boats; more generally, employment standards are an evolution of proscriptions against slavery and indentured servitude. The common arguments against minimum wage comprise the notion of employees as commodities rather than resources; this article reminds us that beyond that, they are human beings. The complex economic argument is that the better business case is the one where resources are husbanded as opposed to being exploited.

    • I urge you to travel to socialist utopias like Cuba. Other than the weather, see if you prefer it there since they embrace much of the same “equality of outcome” theory. Perhaps I have been misled, but historically I don’t think it has served them, or any other socialist society well, both from an economic and humanitarian standpoint. Regardless, it’s not for me. Equality of income provides little incentive to do anything more than the bare minimum.

  10. Why the sudden increase in the minimum wage for Ontario? Maybe Ontario and Canada want a faster rate of inflation, so that the Bank of Canada will raise interest rates higher and faster so that it will have more
    ‘ammunition’ during the next recession.

  11. Countries with higher income, have higher prices ie. higher cost of living. The minimum wage earners will feel richer short-term, but over time as prices are adjusted upwards they will be no further ahead. The salaries of supervisors and managers will gradually rise as well.

  12. Imagine if our minimum wage was $30-35, similar to unionized auto assembly line workers. Such high wages would make Canada uncompetitive internationally – jobs would be moved offshore, our high cost exports would decline, cheaper imports would increase resulting in loss of domestic jobs. We should look at the bigger picture, not just at the fastfood/restaurant sector. Higher minimum wages makes Canadian businesses and products less competitive worldwide. To have a market greater (via exports) than the relatively small population of Canada leads to greater overall prosperity.

    • George, those are economic arguments and as such they are already suspect. First, we are not raising wages to $35. Second, a rise in wages drives up incomes and costs. Before jobs move offshore we have a little thing called the exchange rate which would likely fall to offset some of the dire stuff you are dreaming up. Third, minimum wage mostly impacts the retail sector, I am guessing. So health care, education, finance, real estate, resource extraction, manufacturing and so on are not going to be impacted. Retail is not about exports and it isn’t about imports either – we can’t import our double double.
      You have decided that whatever the current wage is is the right one – by the miracle of supply and demand there is only one market-clearing wage. Sorry, I ain’t buying this pseudo precision. They will change the minimum wage, people will adjust and 5 years from now you won’t be able to figure out the impact. For example, the Bank of Canada says about 50,000 fewer jobs than would otherwise be – classic economics. And what would it otherwise be? How accurate are they at forecasting employment? We create that many jobs every month – man, this impact can’t be distinguished from the usual fluctuations in the data. You guys get worked up – like so many philosophers arguing over how many angels can dance on the head of a pin. You will not be able to point at even one person who will not have a job in two years time because of this change – and neither will the Bank of Canada nor anyone else.

      • Wow Fred, even without an economic argument I think you’ve managed to get it right. 5 years from now you won’t be able to figure out the impact. Both for the average canadian and for the minimum wage earners. Our economy will adjust and most people will be in the same place that they were before.
        .
        That will of course depend on the response of business. More automation may reduce the workforce in general. So there may be fewer jobs overall.
        .
        and you’ve conveniently ignored the effects of the disruption both on employers and employees. For every business that closes and forces its former employees to collect EI there will be a difficult transition period of uncertainty and poverty.
        .
        but hey, I guess some have to suffer for the good of others … right fred?

  13. Bring on the selve serve and robots. I don’t want to talk to a human. Unless I want to!

  14. First off, you cheap labor sociopathic robber-barons need to die in a fucking fire. Seriously, culling you and your ilk from the gene pool is necessary for all of humanity. A living wage in Canada is over $25 an hour now. And you’re still shitting on people for making less than that? Fuck you! Seriously, fuck you! Yeah, those poor ol’ multi-millionaires and billionaires need all the help they can get. I know, why not just open concentration camps instead? Too expensive? How about just shoving the poor into abbatoirs along with the animals than? That sounds much more efficient and cheaper.

    And yet, in economy after economy, it’s been clearly demonstrated that when you pay the bottom rung of society a LIVING wage society as a whole benefits. Unemployment actually does down – look at Seattle since they implement their wage hikes. More disposable income means people by more shit. Access to better food, health care and access to dental care – even more importantly – means an overall healthier society and less of a tax burden to everyone else. There’s NOTHING but upside to making a LIVING wage the target to aim for. If your small business is doing well enough to hire someone than it can afford to pay them a LIVING wage. Anything else is just more of your cheap Scrooge mentality bullshit. So again, fuck off and die. You tiny minority of elitist assholes are precisely why this world is such a shitty place for most of the other people who inhabit it. Can’t wait for the next bloody revolution when all you motherfuckers are put up against the wall and shot and pissed on!

    • “A living wage in Canada is over $25/hr.” If that is accurate (Which it isn’t) please inform Service Canada because my fixed income government pension is only half that … which is sufficient.

      Judging by your language skills you would be unemployable and illustrates your illiteracy.

      • I think he must have been smoking something that’s not yet legal. He should brush his teeth with Drano.

    • Sparky, as much as I’d like to, I’m not going to comment on your language… just think you owe us one explanation: “More disposable income means people by more shit”???? I guess that depends on your definition of “disposable income” (and perhaps your definition of “by”, but as I said, I’m not going to comment on your language or spelling). What, in your opinion is disposable income, when in Canada today, the average household owes 170% of it’s income???? Since this is the main point of your comment, I’d argue your rant is mute…

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