Minimum Wage

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NorthReport
Minimum Wage

Bank of Canada represents the 1% and most certainly not the 99% rest of us

Minimum wage increases could lead to 60,000 fewer jobs by 2019: Bank of Canada

https://www.thestar.com/business/economy/2018/01/03/minimum-wage-increas...

NorthReport

Climbing Up and Kicking Down

Executive Pay in Canada

 

The eleventh in an annual series, this year's report on CEO compensation finds that, for the first time, Canada’s 100 highest paid CEOs netted 209 times more than the average worker made in 2016. Canadian CEOs are again taking home pre-2008-crisis levels of compensation, pushing the income gap between Canada’s top executives and the average worker to record highs. While the idea of a $15/hour minimum wage has faced debate across Canada, rising CEO wages have gone largely unchecked. The report shows the country’s highest 100 paid CEOs on the S&P/TSX Composite index now make, on average, $10.4 million — 209 times the average income of $49,738, up from 193 times more in 2015. 

Taking a historical perspective, CEO pay is moving further away from a simple salary and toward all-out incentives. Author David Macdonald explains what this trend means for compensation amounts as well as the risks it poses to the stability of Canada's economy. Finally, this report offers policy solutions that could help rein in C-suite compensation.

https://www.policyalternatives.ca/publications/reports/climbing-and-kick...

NorthReport

What does Andrea Horwath have to say about Tim Horton's new policy?

http://windsorstar.com/news/local-news/local-tim-hortons-owners-struggle...

NorthReport
NorthReport

This is just a marketing ploy by Tims.

If they are a rogue group cancel their franchise!

Tim Hortons blames 'rogue group' in response to criticism after restaurants cut employee benefits

http://www.news1130.com/2018/01/05/tim-hortons-response-employee-benefits/

 

 

NorthReport

There is a reason these workers are not unionized, but if UNIFOR can unionize some KFC franchises............ 

Tim Hortons spills coffee on workers' wage increase

It's a light year or two away from the profits these workers helped to create for their wealthy employers. This stains the popular company’s public image with mean-spirited employer-employee relations that leave 350 workers without jobs.

This could spell a renewal for unionization in a world that faces endless cutbacks and a lack of job security for employees earning minimum wages.

It may be time for the union movement to dust itself off and come to the rescue.

Canada used to be a place of decent wages and a coveted standard of living. But we’ve been losing it over the last 40 years as wages and benefits have not kept up with the cost of living, the cost to raise children, the cost of housing, and the cost of postsecondary education.

The nation has slipped into a shocking state of indebtedness—especially consumer debt which currently totals $595 billion excluding mortgages, as reported by the Bank of Canada in December 2017.

Unions must undergo a renewal as well, to revisit their purposes, answer criticisms regarding productivity (where they exist), and improve communication with their members to become decisive and relevant.

Governments and corporations need to be reminded about the sleeping giant that changed North America in the 20th century and brought the eight-hour work day and all the benefits that most employees take for granted today (by both union and nonunion workers).

 

https://www.straight.com/news/1014601/douglas-p-welbanks-tim-hortons-spi...

Mr. Magoo Mr. Magoo's picture

Quote:
If they are a rogue group cancel their franchise!

I'm sure the corporate owner would love to.  If you've been following the news on Tim Horton's over the past year or so, a group of franchisees have banded together to air their grievances against Restaurant Brands International with regard to pricing, promotions, fees and other stuff.  My guess is that the "rogue group" comment was a swipe at them.

Ken Burch Ken Burch's picture
NorthReport

You can always count on the extremist Fraser Institute for the usual right-wing sky is falling BS.

No automatic alt text available.

NorthReport

Shocker!

Alberta hasn’t suffered for raising the minimum wage

 

The problem for critics of minimum-wage increases is that history doesn't back up their sky-is-falling claims.

In the year preceding November, 2017 (the latest available data), Alberta's service sector added 12,400 jobs as part of our province's economic recovery. In 2016, while Alberta's economy was still in recession, our service sector added 26,500 jobs.

These jobs were created despite Alberta's minimum wage increasing 33 per cent in 2015-17.

This reality follows smaller but still significant minimum-wage increases in Alberta in 2007 (14 per cent), in Quebec in 2010 (12 per cent) and in British Columbia in 2011-12 (28 per cent). None of these cases resulted in major job losses.

The main reason that the doom-and-gloom predictions from business lobby groups and think tanks fail to materialize is because they assume that estimated employment effects for teenagers apply to adult workers over the age of 20. In reality, minimum-wage increases tend to result in a small percentage of teens losing their jobs, while estimated job losses for adult workers are effectively zero.

Alberta actually has a labour shortage at the low end of the wage scale that is likely to continue for the next couple of years. A higher minimum wage will make these jobs more attractive. There are, in fact, many benefits to raising the minimum wage. A minimum-wage increase is in effect a stimulus to the local economy because low-income earners spend most of their income, and chiefly in their community. Raising the minimum wage increases overall consumer spending power and the amount of money circulating in our economy.

Research published by ATB Financial in September, 2017 shows that restaurant and bar receipts in Alberta are at an all-time high. The claim being made by some commentators that the Alberta economy is too weak right now to support a further increase to the minimum wage couldn't be further from the truth. Minimum-wage hikes also reduce gender income inequality – 60 per cent of workers making less than $15 an hour in Alberta are women.

Minimum-wage hikes don't hurt our economy; they help ensure more working Albertans share in the prosperity of our province.

https://www.theglobeandmail.com/opinion/alberta-hasnt-suffered-for-raisi...

NDPP

Workers Are Under Attack. Where Is The ONDP?

https://buff.ly/2CETmYd

"The week that followed the increase has seen Ontario become a flashpoint for a sharp and bitter ideological class war over the minimum wage. Business owners have been attacking workers and the broader public has in turn grown angry and hostile. The hashtag #boycottTimHortons has been trending on Twitter for the last number of days.

The ONDP leadership has completely ceded the ground of standing up for low-wage workers to the Liberals..."

Boycott Tim Hortons

https://twitter.com/hashtag/boycotttimhortons

Mighty Middle Mighty Middle's picture

NDP MPs are now tweeting up a storm demanding Trudeau implement a $15.00 an hour federal minmum wage.

Pondering

Mighty Middle wrote:

NDP MPs are now tweeting up a storm demanding Trudeau implement a $15.00 an hour federal minmum wage.

Good timing. 

NDPP

Always too little too late..

brookmere

Mighty Middle wrote:
NDP MPs are now tweeting up a storm demanding Trudeau implement a $15.00 an hour federal minmum wage.
Hitching yourself to Wynne's bandwagon might not be regarded as inspiring. Also the Ontario story, which has been very well publicized, will remind people that the minimum wage for almost everyone who matters is a provincial responsibilty. Likewise the coverage of the minimum wage increase in Alberta and upcoming in BC.

 

Sean in Ottawa

Minimum wage interests me greatly as a topic -- it is about justice. The NDP is not taking advantage of the opportunity to make headway -- and neither are most Minimum wage advocates.

Education: The NDP has to lead in terms of education as well as propose things that fall within the mandate of their jurisdiction. I will lay out the arguments here. Many people will not be able to get this at once but the population can understand this over time if people are consistently make the case.

The population is ripe for good arguments and proposals as the media have been pointing out some of the problems with the anti-minimum wage argument. They are numerous stories to the effect that the scary big job losses do not occur and that workers are also consumers who will spend this money. That is part of the battle.

The argument that this is catchup for inflation is an extremely poor argument, however, and there are several better arguments nobody is advancing. I will use Ontario as the statistical basis to explain this although the numbers are generally true for all provinces as they tend to track each other somewhat.

The reason why the argument of catchup is poor is that the highest minimum wage (in Ontario) using constant dollars was in 1975. In today's terms that would bring us to $11.11. This is a long way below $15.

Better arguments go like this:

Technology: Technology is replacing parts of jobs, replacing entire jobs, making work hours more efficient and making those hours more valuable and finally more scarce as a result. Labour has long been recognized as a commodity but so is the availability of work.

Workers are facing fewer but more valuable and more productive hours. On the one hand they have fewer hours and will have fewer still in the future. Underpaying only partly mitigates the competition with technology.

Labour over the last generation has trended to higher pay for fewer hours. Full time workers paying attention to salary have at times not noticed that their pay has gone up while their hours have gone from a standard 44 to 40 to 35 per week.

Hourly wage workers face minimum wage comparisons frozen in past assumptions about how many hours a person can reasonably expect to get and work in a week.  This is a labour market adjustment that salaried workers benefited from that ignored hourly workers. With technology making workers more efficient, people perform more work in 35 hours than they used to in 44. Minimum wage workers are doing this as well but are not compensated for that extra value even as they are offered fewer and fewer hours. The last decades have lead Canadians to understand the term "involuntary part time." These are underemployed people paid an hourly wage based on an expectation of a volume of work that does not exist.

What is happening is a change in the weekly hours of work, expectations of available hours and the value of that work. Minimum wage increases are just addressing that. Thay are not going ahead of the 1975 reality, even though we might  think so given the calculations of hourly wage rates and inflation. We would need a $20/hour rate to make genuine progress on incomes beyond 1975.

These are prime arguments not being made about minimum wage.

Now let's talk about Federal policy since the NDP is speaking on a federal ground about a national wage. This is the wrong approach. First based on cost of living, for example a New Brunswick dollar is like a 65 cent Ontario dollar. Cost of living at 1/3 less in that part of the country compared to Ontario suggests that a one-size fits all policy is not the right one. Individual provinces set minimum wage for good reason. The Federal government could have a minimum wage but it would be unworkable to have it be the same across the country.

Let's talk about the policy the NDP is not talking about. Tax rates on low wage earners. A minimum wage worker, paid $14 per hour at 20 hours a week (average through entire year) would make $14,560. The basic exemption is only 11,800 or so. A full time minimum wage worker averaging 35 hours a week would make $25,480. The government will start taxing that worker at less than half way. It is hypocrisy to tax a worker at well below the minimum legal rate that an employer would have to pay.

If you do the math on $10,000 of income at 15% tax you get $1500 in tax on 1820 hours of work. Add the provincial tax and you have more than $1 taxation per hour on the lowest waged employees. In other words if the Federal government raised the basic exemption to minimum wage, those workers would get more than an extra $1 per hour. If the government is concerned about job loss, business, and the speed of rising rates, they are part of the problem. This increase in the basic exemption to match the lowest rate legally payable, would match the 2019 proposed Ontario minimum wage increase or allow the Ontario government to delay it for a year or two with workers getting a roughly equal benefit. Imagine if the Federal governemnt waived EI for minimum wage workers? Imagine if they covered the costs of CPP for those workers. They would earn more.

The government could have done this with the money they took from the top 1% of earners and gave to the top 90-99% of earners.

The bait and switch of the Liberal tax policy added to the desperation of the lowest waged workers by ignoring them. Why is the NDP not connecting the panic in the land about increases to minimum wage to the policy of taxing workers at extremely low income levels, well below subsistence.

The other issue, I have raised before, is the issue of changing schedules preventing involuntary part time workers from getting a second job and the needed conversation about minimum weekly wages for everyone who does not want to work part time. This is a conversation that could be held at the national level.

Sure, given that most workers do not get paid a federal wage, making that $15 is not much of an issue-- no reason not to. However, the NDP should not pretend that this is life changing for many people as they did during the last election. the NDP has to address the millions of workers on minimum provincial wages. Raising the federal wage is not the answer -- either expanding it to cover more workers or other policies are required.

 

Pogo Pogo's picture

Good points Sean.  We should also follow the money in the Economy.  The Tim Horton Family was unavailable for comment because they were holidaying in Florida, the money went South.  Give a little more minimum wage employees and they will spend it locally.  The clientelle for all the mom and pop service industries crying the blues just grew.

WWWTT

NDPP wrote:

Always too little too late..

One name for you- Andrea Horwath 

She dropped the ball with minimum wage for corporate appleasment and she dropped the ball with government insurance. Now regardless it’s not the NDP job to take heat for the liberals or support liberal policy outside the leslative building.  But Andrea is a throw back from the right leaning swing in the NDP that Layton and Mulcair were all about. Unless the ONDP win government or at the very least win opposition in 2018, I think a lot of ONDP members will want to see her gone.

Sean in Ottawa

Possible strategies to make a difference on this issue can be to speak to various NDP candidates to see if they want to take up the tax issue at the federal level.

It is also possible to raise this with Ontario provincial Liberals who may be concerned about their re-election chances. They might be open to lobbying the federal government with a plan to delay the $15 hour for one year and add this in as well.

It is also posssible that Liberals as well as New Democrats may be willing to help make the defence for Minimum wage on the basis of the arguments I have raised.

This is one of those issues that affects people hugely and any way that it is possible to make a difference should be explored.

The Federal Liberal party may also be willing to listen to the argument about raising the basic exemption.

Don't let mistrust for the Liberals (which I share) to get in the way of pressing this -- there are too many people who would benefit from making this case anywhere there is an ear to listen. This is more about social education than party politics at this point -- in my opinion.

NorthReport
alan smithee alan smithee's picture

$15 means different things to different people. With the cost of food constantly getting higher,hydro bills getting higher and rents becoming ridiculous,a $15 minimum is STILL not enough.

We need as living wage. The minimum should be closer to $20 or a little more.

BTW,Tim Horton's can go fuck itself. I will never do business with them again.

progressive17 progressive17's picture

I have always found Tim Horton's coffee to be vile. Boycotting it has always been a matter for my tastebuds. 

Sean in Ottawa

I am sure most here agree the amount must be higher. At issue is also the way this was done. The government moved nearly 1/3 within a year in Ontario just before an election (coincidence?). And the government is doing this without a discussion about the basic exemption provincial and federal which sees the government tax people at a fraction of the minimum they say an employer must pay. The idea that we would increase this wage at this speed so the government can tax it back is problematic when the federal and provincial governments could have provided over $1 an hour simply by raising the basic exemption.

Now raising the basic exemption is not a replacement for a proper wage, however, the fact that this was not done is a problem given the pace of the increase. The pace of the increase which is more of a problem than the amount and the issue of the basic exemption suggest that the motive for this increase is not what we would hope.

The fact that none of the advocates -- in either the NDP or the Liberal parties -- at any level are making as good a case as ought to be made is worrisome. It also suggests that the parties are using this for their political purpose rather than contributing to better public understanding of the issue. Or that they are less than competent to manage an issue that is extremely vital to the well being of millions of people.

My fear is that while their hearts may be at least partly in the right place they really have no clue as to the impact on the ground of changing work hours and technology on this benchmark rate.

I have been hesitant to add an observation that I have seen only anecdotally. That is that the inflation rate is averaged over all items that people buy and the impact is not level across income groups. I believe that the lowest income earners have faced a higher level of inflation on the items they buy than people at other income levels. This is based on my understanding of what is driving inflation.

Rents for example go up more than inflation -- the inflation rate is the guidline which was intended to be a maxium rent but instead it is automatic and subject to increases when the landlord spends more money or any time a new tenant moves in. This means that the average rental rate increases above inflation consistently even if an individual increase is supposed to be capped at inflation. Food has increased above inflation in many years while luxuries have been below that. Energy, transportation and communications have increased above inflation. The essentials go up above inflation and over time this adds up.

Sean in Ottawa

progressive17 wrote:

I have always found Tim Horton's coffee to be vile. Boycotting it has always been a matter for my tastebuds. 

I know. I really do not understand. I can grind the beans from excellent coffee at home and there are people I know who still prefer the local dishwater from timmies. They joke and say they put crack in it.

They tell me that they perk up more with it. You cannot tell them that this effect is not actually based on the chemistry of the coffee.

Mr. Magoo Mr. Magoo's picture

Quote:
They tell me that they perk up more with it. You cannot tell them that this effect is not actually based on the chemistry of the coffee.

The roasting of coffee beans degrades caffeine, so "light" coffee roasts, like Tim's, do, in fact retain more caffeine than "dark" roasts, like Starbucks, or an espresso.

Sean in Ottawa

Mr. Magoo wrote:

Quote:
They tell me that they perk up more with it. You cannot tell them that this effect is not actually based on the chemistry of the coffee.

The roasting of coffee beans degrades caffeine, so "light" coffee roasts, like Tim's, do, in fact retain more caffeine than "dark" roasts, like Starbucks, or an espresso.

I assume it is also related to how many beans are in the coffee. I use a French press and quite a lot of coffee beans to make it strong. Expresso also has a lot of bean per ml as it is reduced. I know the beans are lower in caffeine but I am not sure that the final product would be. This is true though if you choose a dark roast and make it the same way of course.

Mr. Magoo Mr. Magoo's picture

Apologies for this thread drift, but just for fun, here's a chart listing the amount of caffeine in Tim's drinks.

Evidently, one of their small coffees, same volume as their espresso, has triple the caffeine.  Their XL is like 7+ espressos.  That should have anyone jangling like a $2 alarm clock.

That said, their coffee just doesn't really taste good, to me.  Like yourself, I don't like dishwater.  If I could have a Starbucks Americano every day, I would.

laine lowe laine lowe's picture

Raising the basic exemption on taxes seems to be the popular rebuttal from many who are against raising the minimum wage. When I was a mininum wage earner, whether while going to school or not, the basic exemption only came into play once a year - when I filed taxes. All of a sudden I got a windfall tax refund - a day of celebration for sure. But the rest of the year was a real struggle, especially for making rent.

 

mark_alfred

Andrea Horwath did say more about the minimum wage and the reaction of some Tim Hortons franchisees.  I agree with what she said.  https://www.facebook.com/AndreaHorwathONDP/photos/a.10150181163768596.30...

Various groups, including many labour councils and the group Fight for $15 and Fairness, are holding rallies across Ontario at various Tim Hortons.  Andrea Horwath will be in attendance at the Cobourg rally.  See image below for listing of various rallies across the province.

Or, if the photo doesn't show up, then see this FB post:  https://www.facebook.com/rankandfile.ca/photos/a.651493104895271.1073741...

WWWTT

It’s good you’re on top of it mark_alfred! Good job brother!

Unionist

laine lowe wrote:

Raising the basic exemption on taxes seems to be the popular rebuttal from many who are against raising the minimum wage. When I was a mininum wage earner, whether while going to school or not, the basic exemption only came into play once a year - when I filed taxes. All of a sudden I got a windfall tax refund - a day of celebration for sure. But the rest of the year was a real struggle, especially for making rent.

Thanks for that breath of realism, laine.

Talking about tax exemptions as an alternative to the movement to raise the minimum wage is a diversion, whether it comes from left or right. Raising the minimum wage is a vital movement to limit the exploitation of labour, and to curtail the "race to the bottom". It is about wage labour, not merely or even primarily about poverty. An end to poverty requires many other social and economic tools.

And by the way - reducing taxes instead of raising the minimum wage (even partially) is a subsidy by society to the most exploitative employers. No thank you.

The other lever is unionization. Unions whine and cry about how hard and expensive it is to organize precarious workers. There are 3 unionized Tims in Winnipeg. One by one, it will be done.

 

Sean in Ottawa

Unionist wrote:

laine lowe wrote:

Raising the basic exemption on taxes seems to be the popular rebuttal from many who are against raising the minimum wage. When I was a mininum wage earner, whether while going to school or not, the basic exemption only came into play once a year - when I filed taxes. All of a sudden I got a windfall tax refund - a day of celebration for sure. But the rest of the year was a real struggle, especially for making rent.

Thanks for that breath of realism, laine.

Talking about tax exemptions as an alternative to the movement to raise the minimum wage is a diversion, whether it comes from left or right. Raising the minimum wage is a vital movement to limit the exploitation of labour, and to curtail the "race to the bottom". It is about wage labour, not merely or even primarily about poverty. An end to poverty requires many other social and economic tools.

And by the way - reducing taxes instead of raising the minimum wage (even partially) is a subsidy by society to the most exploitative employers. No thank you.

The other lever is unionization. Unions whine and cry about how hard and expensive it is to organize precarious workers. There are 3 unionized Tims in Winnipeg. One by one, it will be done.

 

 

I disagree with both points here -- at least in part  or in application to my argument.

The first issue is the statement that taxation is an alternative to raising the minimum wage. NOBODY is saying that. It is a corresponding part of the package and not a replacement. It is logical that there be some relationship between the two given that some of the rationales for both (taxation and wage minimums) come from the same places: cost of living, economics, and fairness to workers earning the lowest rates. But let's get to the objections here:

First, a substantial increase in the basic exemption would lead to a reduction of taxes withheld at source so this is not just money that would come once a year. To say otherwise is to misunderstand the process of withholding tax at source.

Second, these are not either or issues -- raising the min. wage vs not taxing people who are at the lowest incomes. The NDP had a blunt proposal to do roughly the same a few years ago (to knock people earning less than $20k off the tax roles). I disagreed with that policy at the time becuase it did not acknowledge other exemptions and so removed the relative benefit of many other exemptions. I prefered a general increase in the basic exemption leaving other credits in place.

Now, let me agree with the concept of a tax that is too low being a subsidy. But -- let's look at that contention more closely. If you tax too little then you are subsidizing the activity. If you tax too much then the reverse is also true as you are making the activity subsidize general revenues. In other words in this case you are making the activity of hiring and paying low wage workers contribute more to general revenue than is reasonable or fair. When you consider the activity of taxing incomes at less than 50% of a living wage you have that problem.

Businesses are not asked to pay income tax on their revenue below cost. They get to deduct first the cost of functioning. The basic exemption is a blunt attempt to do that for individuals -- take out some of the cost of living before requiring a contribution. The idea that all costs can be deducted before profit is declared on a company and yet, by any measure, nowhere near the cost of living is taken out before taxes must be paid for individuals is an imbalance. This is not a subsidy unless you consider that people who have not enough money to live should have taxes extracted from them.

So, in the case of the basic exemption it is the argument of taxing poor people too much that has more validity than a subsidy arguement going the other way. The idea that a person earning $12,000 must -- and can afford -- to make a contribution to the state's revenues is problematic. The amount they charge for their services (enforced by the state) has to then include this burden.

Workers are competing with other ways to get the job done -- machines and foreign labour. Sure this is an argument abused by business who want to reduce what they pay to workers. It is indeed offensive for a business that is getting the benefit of this labour to pay less for it. However, it is not offensive to apply this argument to government which is taking money out of that transaction to fund itself when governments have many other avenues to get money.

It is frankly immoral to make the argument that workers who earn less than what it costs to live, getting a break on taxes, would become a subsidy when the government subsidizes every other income level using the same argument -- lower than fair taxation. and then there is business itself. You are in the territory of flat taxers here.

Having ultra-low incomes taxable is a rejection of any understanding of the reality of the exchange of labour for money: a tax on that labour when it is deriving so little for the worker, adds to the cost of that labour without benefit to the worker. As well, there is a capacity to pay issue as well as a fairness issue. Low wage workers should get a greater share of the value created from their labour. That does not mean just a privilege of paying tax on extremely low earnings -- it means having that cash.

Business must be forced to pay as much as possible to the workers. However, government taxing that back, on ultra low incomes, is not even rational when you consider that there are real arguments about the limits workers can be paid: It is a recognized fact that the cost of living is far above the minimum that business can be made to pay -- politically and practically. 

Pure ideology is not a benefit to the lowest wage workers. Ignoring both political realities and economic constraints is unhelpful. The idea that big bad Canadian business does in fact have to function in an economy of competition is worthy of recognition -- even as we must reject the level of excuses they make to escape paying a fairer wage.

At present in Ontario we have a Liberal government likely to lose the next election to a right wing government; we have a technology context where workers are being replaced and the number of hours available to work is being reduced; we have other political parties that are wanting to cap minimum wage and who have no interest in the wellbeing or income of workers. In this context, raising the cost of labour by 1/3 -- while the government taxes back some of that income is contradictory in message and reality. At the very least the government could have stepped back for a time on the taxes of lowest wage workers allowing a more gradual increase in their labour cost, or stepped back allowing them, when earning below the cost of living, to apply this additional income to the cost of living. You can calculate based on marginal rates that a substantial amount of the increase in minimum wage will effectively be clawed back by the government. How is this beneficial in application to people earning below a living wage?

We know that the cost of a living wage is above $15/hour. Why did we push for this number? Perhaps it is becuase it is the maximum that the market and the politics would bear. So given that this is the maximum -- for the moment -- then let's stop taking taxes out of that squeezing those workers between cost of living and the limits on what their incomes will generate.

Let us also stop with the emphasis only on ideology and speak in practical terms. We are in the middle of a massive adjustment in labour from less efficient more plentiful hours to more efficient, valuable and scarce hours. This time of adjustment is difficult and workers, who have very low hours in many cases, are paying the price. This is not practically a time to speak to the lowest wage earners about the privilege and honour of paying tax. Given the numbers of wealthy and business activities and earnings that are under-taxed in canada there is no moral basis in this argument.

Raising the basic exemption also serves to address the need where greatest -- on the lowest annual incomes. There are people who are already earning $20 an hour but cannot get enough hours to make that a living wage. This is why you need tax exemptions on total income to supplement minimum wages at the hourly level. To look at one without the other is to miss the impact of reduced work week on hourly wage earners.

Finally, let's look at the principle. We would reject a tax on social assistance income or on the first dollar. I doubt that I have to start with defending the basic exemption to people here. So given that what is the matter with adjusting its cut-off? What is the rationale of having a basic exemption so far below the cost of living? The only argument for that reality is that this is the way it has always been in Canada -- and yes, in proportion, it has been worse. But that does not make it right.

International comparisons can be made between the minimum wage and the basic exemption. In Germany the basic exemption is about where Canada's is but the minimum wage is about $12.50. There is a lot of logic to make this proportional and move them together. This would mean that in raising minimum wage form the ten dollar range to the $15 dollar range there shoudl be a corresponding increase of about a third in the basic exemption.

I think many people here with a focus on salaries and annual income may find it difficult to appreciate the application of minimums when it comes to hourly wages and why it is so important to recognize the lowest incomes with a more rational and fair basic exemption.

But we could wrap all this up and take a stand on principle and ignore the impact on people. For my part the principle I apply first is that the workers and people come ahead of principles that would seek to leave them at disadvantage.

Pondering

I agree 100% with Sean. The basic exemption should be equal to the poverty line. It would be economically beneficial to the country. It is similar to the idea of basic income. Poverty costs the system. It isn't charity to not tax people living below the poverty line, it's common sense. As economists have noted that money goes directly back into the system as the lower your income the more of it is spent locally. Keeping money in circulation is what stimulates the economy.

Personal income tax, introduced under the Income War Tax Act of 1917, was conceived -- like the other wartime taxes -- as a temporary measure. This act both expanded the scope of the Business Profits War Tax and introduced a tax based on yearly income to most Canadians. Those individuals who were exempt from the tax included the Governor General, foreign consuls, and those who were on active service overseas. Married Canadians with an income below $2,000, or unmarried Canadians with an income below $1,000 were also exempt from filing a tax return. Under the Income War Tax Act, eligible tax payers that did not submit a tax return were fined $100 per day with a maximum penalty of $10,000. This was an incredible fine considering, for example, that an annual married income of $3,000 was only expected to pay $20 in income tax!

https://www.collectionscanada.gc.ca/firstworldwar/025005-3300-e.html#b

The personal exemption is now at 11 or 12 thousand.

Further some charges we think of as taxes are not. No one is exempt from EI and CCP deductions as they are contributions not taxes which is why it was so outrageous for Harper to dip into the EI funds. CCP in particular is individualized.

Unionist

Sean in Ottawa wrote:

The first issue is the statement that taxation is an alternative to raising the minimum wage. NOBODY is saying that. It is a corresponding part of the package and not a replacement.

There's a powerful movement for wage fairness across the country, spearheaded by workers and their unions, which is starting to bear fruit, and which is under attack by the wealthy and their mouthpieces.

Tax reform is absolutely necessary. It's an entirely separate struggle. Like affordable child care. Or free internet. Or free post-secondary education. Or housing.

Quote:
It is logical that there be some relationship between the two given that some of the rationales for both (taxation and wage minimums) come from the same places: cost of living, economics, and fairness to workers earning the lowest rates.

Yeah, everything is related - including the other things I mentioned. But minimum wage is like health and safety, or workplace harassment, or maximum hours of work, or the requirement to pay overtime, or mandatory breaks, or vacations. It sets a floor for exploitation and oppression of workers by employers. It targets employers. It says, "you want to profit from someone else's labour? Here's the absolute minimum you must do."

Raising tax reform in the context of a real-life movement to increase the minimum wage risks diverting from that movement.

I can imagine my union fighting for a wage increase, meeting with the same "argument". "What good is that - we'll just end up in a higher bracket - we need to move the yardsticks too!" Yes indeed. And we need affordable child care. And better rent controls. And world peace.

I won't deal with your bizarre accusation that my argument is based on "ideology" rather than caring about the practical consequences for people.

Finally - if we're talking about lifting people out of poverty, and building a fairer society (which is not what the minimum wage movement is primarily about) - then I think tax reform should not be over-emphasized. I believe, and have long stated here, that society's aim should be not to give people money, or re-shuffle how much money people can keep, but rather to give people necessary goods and services, free of charge, on an ever-expanding basis.

Pogo Pogo's picture

Unionist wrote:
Tax reform is absolutely necessary. It's an entirely separate struggle. Like affordable child care. Or free internet. Or free post-secondary education. Or housing.

It was a few years ago that our community group hosted Seth Klein and a presentation on the living wage, but his point at that time was that we should not be seperating the issues they are all one package.  Yes you need to have focussed campaigns, but in the end the ability to meet the cost of living is affected by a range of items and they all deserve attention.

NorthReport

Follow the money 

Down, down it goes. Where it stops nobody knows.

When I heard that our 1 per cent CEOs by 11 AM in the morning on Tuesday, January 1st  first day back to work in the new year had already made more money than the rest of us would make in the entire year it sickened me. 

It’s about the rich and the poor It always has been, and it always will be. Isn’t it time to change things. Look at what is actually happening with minimum wage. By the time the vicious right-wing Fraser Institute finally accept $15 an hour (actually they will fight it to the bitter end) it will be long past time for a $20 an hour minimum wage. Even at $20 an hour you are going to be very challenged to find accommodation in Vancouver 

it’s all connected 

 

 

https://finance.google.com/finance?q=TSE:QSR

Sean in Ottawa

@Unionist -- there is no logical reason to disengage from an argument about tax in this context. That is just one strategy. I argue here that it is not a good one. Yes, I was insulting to you. Perhaps you might want to consider that I answered that way because instead of engaging my argument on the merits you sought to shut it down based on some idea of strategy. That is not what this place is for.

You cannot honestly argue that I have ever suggested that basic exemption change is any replacement for a wage hike. I have argued that it is part of the process and even a sign of sincerity about the government's concerns for low wage workers. I have always agreed to or proposed higher wages.

I think a better strategy is to never delink these things. In other words, not allow a conversation about tax not to cross over to minimum wage and the cost of living. such a strategy might have been more successful fighting the stupid tax give-away the Liberals made in the last couple years leaving middle and lower income people completely outside.

I would never suggest that a tax cut be a replacement for minimum wage. However, the fact the government taxes at such a low level is damaging to minimum wage arguments. It creates a low wage benchmark that is entirely unrealistic and sets the government up for criticism of hypocrisy. It is wrong to confuse a basic exemption with a tax cut. They are similar but very different.

The method of increasing the minimum wage was also damaging to its arguments. The Liberals have been in power a long time in Ontario and left Minimum wage largely untouched until the last second before an election that they ae very likely to lose to a party who will do great damage to lower wage workers should they win. Given the rush the government could have packaged this basic exemption increase with the wage to show that the government was sincere in the urgency of providing more money to the workers who need it most. 

You are also neglecting to answer -- which is why I accused you of speaking from ideology -- the other parts of this argument. The most important one is that minimum wage is hourly and the basic exemption is on annual income. a focus just on hourly rates neglects the emergence of the volume of involuntary part-time workers. No hourly minimum wage will address reduced hours alone.

All of these elements are in fact related and it is the arguments that decouple these things that are the most dangerous. this is a common complaint I have with left activists who choose to isolate things in a mistaken idea that this leads to a better strategy if only everyone else will focus only on what they want to focus on at that moment. The idea that people on the left would abandon basic exemption as a tool is a tactical error that comes from a strategic error of dividing arguments instead of engaging them and making the links that are required on a constant basis. I am not of the opinion that this widely used tactic really works in any cause as much as people think it does. It is better to engage, expose and debunk when the other side deflects than to pretend that only our issues will get airplay.

Now on that let's complete the connections here: let's go to basic income. The right rely on the divide and conquer strategy of separating concepts of a basic income, basic exemptions and hourly minimums. All three of these are government options that address lowest wage earners. The all come up for the same reason.

Now taxes above the basic exemption are another matter and there are good arguments about disconnecting tax rate cuts from wage arguments such as the proposals in the US where conservatives offer to reduce taxes as a ruse to drive wages down. This makes all tax cuts ABOVE the basic exemption something to consider carefully.

There is an emphasis among the right wing to focus on tax cuts and ignore the basic exemption. Many would like to reduce the rates all the way to the bottom and even lower the basic exemption. Some would do this by making changes to income tax and others are happy with consumption taxes as a tool to tax to the bottom without regard for cost of living.

Why do you think Conservatives and right-wing Liberals ignore the basic exemption and discuss tax cuts when they could use a basic exemption to provide bottom up cuts to all brackets? Imagine if instead of a tax cut the Liberals had brought the basic exemption to $20,000 a year? Had they done this the middle would have had a significant break that and the lower the income the greater the impact of that. Nobody would have been left out.

The basic exemption is the key to the difference between both left and right flat tax arguments. The right would use a flat tax to be regressive -- have no or a low exemption making lower income people pay more. On the left some have argued that a high enough basic exemption would offer all the progressivity you need in a simple way.

Pondering

One angle I haven't heard discussed, is it possible this move will help Wynne be re-elected?

Sean in Ottawa

Pondering wrote:

One angle I haven't heard discussed, is it possible this move will help Wynne be re-elected?

It is a gamble. It seems that the Liberals are betting on minimum wage workers rewarding them -- would the reliably come out to do that? Perhaps.

Of course if unemployment rises due to the speed of the change this will backfire -- especially since there is a strong support for the level but the single jump is what is being criticized.

Now my criticism of the government on this is that they waited so long that they had to do it too quickly. That said, it so certainly an extremely positive thing that they are doing it at all.

I think the upcoming election may be hard to predict as it is an unknown how the Progressive Conservatives will appear and if they will continue their pattern of blowing election by having their RW dog whistles become audible to the entire population. The NDP is also an unknown quantity with some potential to do better or not.... The Liberals could somehow still end up with a government or they could end in last place.

JKR

 

Sean in Ottawa wrote:

We know that the cost of a living wage is above $15/hour. Why did we push for this number? Perhaps it is becuase it is the maximum that the market and the politics would bear.

I think the rule of thumb for many economists is that the minimum wage causes economic harm when it goes above half the average hourly wage. Moreover, many economists have shown that a minimum wage improves the overall economy when it approaches nearly half of the average hourly wage. So it seems that minimum wages have a very important, yet partial, role to play in establishing a strong and equitable economy.

SeekingAPolitic...

I will go against the idea that cutting taxes on labour(pay roll or personal deduction) will lead to a healthy system.   The onus should be on the employer to provide higher wages.  Not for the government to cut revenue out of the system.

Instead some countries went to the opposite way.  Keep wages higher, collect more taxes from higher wages, and dont cut taxes on the worker.   Instead use that money to fund univerisal social services and get all business out of providing general healthcare, drugs, dental care, etc.  Business pays higher taxes and wages in return they do not pay directly for above social warfare schemes. 

  

Unionist

SeekingAPoliticalHome wrote:

I will go against the idea that cutting taxes on labour(pay roll or personal deduction) will lead to a healthy system.   The onus should be on the employer to provide higher wages.  Not for the government to cut revenue out of the system.

Amen.

Martin N.

The increasing use of technology in the fast food industry will generate higher revenues and lower costs and by the same token should result in higher remuneration for better skilled workers. Paying minimum wage for tech-savvy workers is an attempt to get those skills for free.

Mr. Magoo Mr. Magoo's picture

Quote:
Paying minimum wage for tech-savvy workers is an attempt to get those skills for free.

In the context of the fast-food industry that you refer to, what constitutes "tech-savvy"?

The person who programs the food order kiosk?  Or the person who fills that order?  The person who designs the automated fryer?  Or the person who takes the fries out when it beeps?  What kind of "tech-savvy" are we talking about?

Unionist

Mr. Magoo wrote:

Quote:
Paying minimum wage for tech-savvy workers is an attempt to get those skills for free.

In the context of the fast-food industry that you refer to, what constitutes "tech-savvy"?

The person who programs the food order kiosk?  Or the person who fills that order?  The person who designs the automated fryer?  Or the person who takes the fries out when it beeps?  What kind of "tech-savvy" are we talking about?

Nice diversion. Both of you. Let's talk about something else!

Fast food servers, and computer programmers, and progressive journalists, and anyone else who works for someone, will be rewarded according to the capitalist market. When they are unionized, we at least have a chance to ensure that they are rewarded at the high end, rather than the very bottom, of what the labour market will bear. That's the best we can do under capitalism. And let's get on with it!

Pondering

Free market capitalism maintains that the law of supply and demand should determine the cost of everything including labour.

That is the equivalent of might makes right when applied to necessities of life. That is why gouging during disasters is illegal.

It's why price-fixing is illegal. It is the mighty taking advantage of their power to get more than their product is worth.

Free marketers want labour to be subject to the laws of supply and demand. An employer should only have to pay as much as they have to to get someone to work for them. If someone is willing to work for 5$ an hour they should be allowed to.

Minimum wage recognizes the power imbalance between employee and employer but it doesn't go far enough. It is still just a bandaid on the supply/demand labour formula.

An employee's worth should be predicated on the notion that everyone who contributes to a product is entitled to a reasonable share of the profits generated.

http://www.cnn.com/2013/11/21/opinion/sutter-swiss-executive-pay/index.html

Here in America, the land of unequal opportunity, the CEOs of top-500 companies make in a single day about what it takes an average "rank-and-file" worker a year to earn, according to the AFL-CIO, the federation of unions. Switzerland has an average CEO-to-worker compensation ratio of 148 to 1, the group says.

The average U.S. rate is 354 to 1, according to the AFL-CIO.

Others put the ratio somewhat lower, around 273 to 1 in 2012.

Either way, it's bad. And some U.S. companies are worse, still. JC Penney Co. has the highest ratio -- 1,795:1 -- on a list of 250 businesses compiled by Bloomberg. That department store's CEO got $53.3 million in pay and benefits in 2012, Bloomberg says. Workers, by comparison, earned only about $30,000 a year.

The reason used to defend CEO pay is the law of supply and demand. That's what it takes to attract top talent, as though it is a rare breed capable of running large corporations. It's why execs had to be given massive retention bonuses for fear they would instantly find other jobs paying just as well. From the same article:

Swiss voters on November 24 will consider capping executive pay at 12 times what the lowest-paid worker at a company makes -- the premise being that a CEO should make no more in a month than a low-level employee earns in a year.

The referendum, which is called the "1:12 initiative" and began after supporters gathered 100,000 signatures to put it on the ballot, is the kind of elegant solution to income inequality that we in the United States should consider more seriously.

Unfortunately it failed but maybe that is because it was so extreme.

So the question to me is not if we should do something about outlandish executive pay, but what, exactly. The 1:12 ratio would be unlikely to gain any traction in the Untied States, said Mark Borges, principal at Compensia, a company that does consulting on executive pay issues. He called the measure, which, according to Wermuth, includes stock options and other non-salary forms of pay, "potentially draconian" and said most ratios between CEO and worker pay he hears discussed deal with three-digit numbers. Twelve is a shock, I'll agree, and it's probably too extreme for the United States.

The entire article is a good read but I find the most compelling argument missing. Everyone who works for a business contributes to its success therefore is entitled to a reasonable percentage of the wage paid for the labour that produces whatever is sold.

That increasing minimum wage will speed automation is nonsense. The order panels at MacDonalds started appearing long ago as have self-serve check-out lanes. Anything that can be automated or dispensed with will be regardless of minium wage.

Mr. Magoo Mr. Magoo's picture

Quote:
Free market capitalism maintains that the law of supply and demand should determine the cost of everything including labour.

In our regular lives, I think we mostly agree.  If you have a rare, Wayne Gretzky rookie hockey card, I doubt you'll sell it for the dime you paid for it.  Remember, that dime included other cards, and gum!  If you're selling your bicycle on Craigslist and you get 10 offers, then barring some emotional story, you're probably going to go with the highest offer.

I think most capitalists are aware that capitalism isn't, and won't be, completely unregulated.  But the pendulum has swung too far if we tell a (let's say) milk producer that they must sell milk for less than what it costs them to produce it "because people need it".  No matter how badly we want to see them get a comeuppance, we're not going to benefit in the long term by making them take a loss.

Quote:
It's why execs had to be given massive retention bonuses for fear they would instantly find other jobs paying just as well.

Is that true, or not true?  What I mean is, if some corporation told a potential CEO that they'd only receive $200K, would that call their bluff and they'd say "OK, fine!!" and stay?  Or would they, in fact, go somewhere else?

And more to the point, would you, or I, or someone fresh out of the B.A. program, jump up and run Yahoo.com for that 200K?

It's nice to say "anyone can be a CEO!  There are no special skills required, other than the ability to arrive at noon, leave at 1 and take a one hour lunch!!".  But then why don't we all just start up a company and appoint ourselves CEO?  Shouldn't it be that easy?  You don't have to become a CEO thanks to a job posting on Monster.com.  You can also be the CEO of the company that you start, and can't any of us do that?

Quote:
That increasing minimum wage will speed automation is nonsense.

That's like saying that increasing the cost of a bottle of Coke to $50 will make water more popular is nonsense.  I assume that companies compare the cost of human labour with the cost of automated labour, but what's your take on that?

Pondering

Mr. Magoo wrote:
In our regular lives, I think we mostly agree.  If you have a rare, Wayne Gretzky rookie hockey card, I doubt you'll sell it for the dime you paid for it.  Remember, that dime included other cards, and gum!  If you're selling your bicycle on Craigslist and you get 10 offers, then barring some emotional story, you're probably going to go with the highest offer.

I didn't say the law of supply and demand shouldn't apply to anything I said it shouldn't apply to labour and we need more protections against price gouging. I'm sure that can be done without impacting craigslist sales.

Mr. Magoo wrote:
I think most capitalists are aware that capitalism isn't, and won't be, completely unregulated.  But the pendulum has swung too far if we tell a (let's say) milk producer that they must sell milk for less than what it costs them to produce it "because people need it".  No matter how badly we want to see them get a comeuppance, we're not going to benefit in the long term by making them take a loss.

Dairy management is working just fine in Quebec. I don't mind paying enough for farmers to make a good income. I do want to make sure the people working for the farmers are also getting paid a fair share. It isn't about punishing anyone. That is neoliberal propaganda.

You may not have noticed but the trend towards deregulation over the past decades has led to tragedies like Lac Magantic. Financial deregulation led to economic damage we still haven't recovered from. Privatization of government services has been predicated on the notion that goverment is wasteful and private industry can provide the same services for less, applying the law of supply and demand because businesses will compete with one another. Because government has no competition and no shareholders it is wasteful. Unions have been weakened to prevent interference with the natural law of supply and demand.

The principles of free market capitalism don't have to be applied at 100% to do  massive amounts of damage.

Mr. Magoo wrote:
Is that true, or not true?  What I mean is, if some corporation told a potential CEO that they'd only receive $200K, would that call their bluff and they'd say "OK, fine!!" and stay?  Or would they, in fact, go somewhere else? 

200K is a bit extreme. They could still make millions.

A $1 million salary worked for American CEOs from the 1930s to 1980s, she said. CEO pay, including options realized that year, jumped about 875%, to $14.1 million, from 1978 to 2012, according to the Economic Policy Institute. That increase, which is calcuated using 2012 dollars, according to EPI, is "more than double stock market growth and substantially greater than the painfully slow 5.4% growth in a typical worker's compensation over the same period."

A 5% increase at the bottom versus 875% at the top.

All I need to know is that last line to support any politician willing to act on income and wealth inequality. CEOs making 200K work for small companies and are probably already within any ratio that would be set. A 1/12 ratio, which is extreme, would mean if the lowest worker makes 20K the CEO could make 240K. A ratio of 100 to 1 would allow the CEO to earn 2 million. A ratio of 150 to 1 would put us in line with CEOs in Switzerland. I think enough of them would still be incentivized to work.

Mr. Magoo wrote:
It's nice to say "anyone can be a CEO!  There are no special skills required, other than the ability to arrive at noon, leave at 1 and take a one hour lunch!!".

I didn't suggest everyone in a company should be paid the same amount. CEOs just aren't as rare and brilliant and indispensable as they proclaim themselves to be.  Few people are truly indispensable. Mark Wahlberg and Michelle Williams were not worth 1.5 million versus less than 1 thousand respectively, deals which were negotiated by the same agent. I'm not saying there should be a million dollar cap, but I suspect you could find a qualified CEO for any company for 2 million dollars a year.

Mr. Magoo wrote:
 But then why don't we all just start up a company and appoint ourselves CEO?  Shouldn't it be that easy?  You don't have to become a CEO thanks to a job posting on Monster.com.  You can also be the CEO of the company that you start, and can't any of us do that?

No. The Steve Jobs of the world are rare. We live in a society of mass produced goods and it costs a lot of money to set up a factory or buy inventory to sell or even open a single restaurant.

Mr. Magoo wrote:
 That's like saying that increasing the cost of a bottle of Coke to $50 will make water more popular is nonsense.  I assume that companies compare the cost of human labour with the cost of automated labour, but what's your take on that?

My take is that automation is so much more efficient than human labour that depressing wages to try to hold it off won't work. At best it might delay automation a few years. If something can be automated and still generate as much profit it will be.

Mr. Magoo Mr. Magoo's picture

Quote:
I didn't say the law of supply and demand shouldn't apply to anything I said it shouldn't apply to labour

I'm really not trying to be "anti-labour" here, but what makes labour an exception?

Quote:
You may not have noticed but the trend towards deregulation over the past decades has led to tragedies like Lac Magantic.

OK.  But to be fair, if the government had overseen all aspects of rail safety, and Lac Megantic still happened, would you suggest that the government is too lax, and support private oversight?

Quote:
CEOs just aren't as rare and brilliant and indispensable as they proclaim themselves to be.

Then why do companies who seem obsessed with the bottom line seem to want to hire CEOs and pay them huge amounts?

Surely, someone would work for less, right?  Why would a Board of Directors approve the hiring of someone for $15M a year if someone equally competent could be hired for $500K a year?  Or maybe even less??

Quote:
No. The Steve Jobs of the world are rare.

I'm not saying we have to be Steve Jobs.  But if you and I know as much as any overpaid CEO, why shouldn't we just start our own company and make a million?  Our company doesn't have to be Apple for us to live very comfortably.

Quote:
If something can be automated and still generate as much profit it will be.

I completely agree.  I just think it's interesting that an automated order kiosk at a McDonalds, or a self-serve checkout at Loblaws, or a self-driving taxi would be seen as taking away good jobs, but an industrial dishwasher, a soda machine, traffic lights, ATMs, or self-serve gas pumps aren't.

 

 

SeekingAPolitic...

Quote:

I didn't say the law of supply and demand shouldn't apply to anything I said it shouldn't apply to labour

I'm really not trying to be "anti-labour" here, but what makes labour an exception?

--------------------------------------------

I believe in a capitalist society labour is a commodity at the end the day.  Your value to in capitalist system of production is largely tied to what you can earn and buy.   When you look through all the clatter of mass media ask yourself whats your contribution to society.  Are you a mother, husband, partner, how do you view your relationship with others in society?  Whatever answer you give to the question, it is the thin veneer that clouds the truth of your position in a capitalist system of production.  That is the happy face on system that was created after the feudalism.  Capitalism has not changed but veneer we all project to accept it has changed.  

By turning labour into a commodity with a unit value and making interchangeable as a commodity your destroying the thin veneer that hides the nature of our current system of production.  You will not earn friends because the right wants the status quo the those on left(majority) want add some colour to the veneer rather than looking below it.

 

Mr. Magoo Mr. Magoo's picture

Quote:
I believe in a capitalist society labour is a commodity at the end the day.

Certainly the labour that is a commodity is a commodity.

If you work for yourself -- making and selling jewelry on Etsy, let's say -- then your labour isn't a commodity.

If you sell your labour to someone else -- making auto parts in a factory, let's say -- then your labour is a commodity.  You choose to sell it to a company, and they buy it the way they buy raw materials, or pay for electricity.

If you work for, let's say, a non-profit, or for the government, you're still selling your labour, even though it's not to some unlikeable, rich capitalist who owns the machines.

Nobody would call Rabble.ca a "capitalist".  But when they outsourced the moderation of their main page discussions to Disqus, do you think they did it to:

a) spend more money on moderation and support a foreign business?

b) save money?

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