Gap between rich and the rest must be narrowed

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Recently the provincial opposition proposed thatthe minimum wage in BC be raised to $10 per hourfrom $8 per hour. Not surprisingly thegovernment and its owners in the business sectoropposed any such idea, even though the minimumwage has been frozen since 2001 while the costof living continued to rise.

Meanwhile, thissame government appointed three of its affluentfriends to research the pay of MLAs and make arecommendation on MLA compensation. Notsurprisingly, these hand-picked citizensrecommended a pay increase for MLAs, a 29 per cent increase plus increases in benefitsand extra pay.

The base pay of MLAs is $76,100 per year. A29 per cent pay raise would be over$22,000 per year, an amount that is roughly thesame as a full year's income or more for half ofthe workers in the province. It is considerablymore than the annual wage of a full time minimumwage worker at the current rate, and still morethan most if the rate was raised to $10 perhour.

And we haven't even thrown in theincreases in benefits yet, or the higherincreases for the premier and cabinet members.

On the issue of the MLA pay increase one mustask by what moral standard can a governing partythat has consistently fought wage increases inthe public sector to the point that it hasbroken contracts and imposed austeresettlements, and which refuses to address thesub-standard income level at which the minimumwage is set, find itself deserving of such a fatincrease in its own income? Perhaps the answeris that they have no morals.

One must also question the morals of thebusiness sector that resists the idea of payinga livable minimum wage while at the same timeopposing taxes to provide social services tothose whom they keep in poverty.

On the issue of the minimum wage one must askwill increasing it solve any problems? If anincrease in the minimum wage causes an increasein the cost of goods and services which in turnputs pressure on everyone else to seek anincrease in income which in turn causes furtherrises in costs, what is gained?

The realproblem we are facing is not just low wagesat the bottom of the spectrum, it is also moreprofit at the top. For a number of decades wehave been caught in a situation where topincomes have been rising by a much larger amountthan the average and lower incomes. We have aneconomic system that is concentrating wealth intoo few hands, a system in which most of us arelosing ground.

In Canada the gap between the rich and the restof us has been steadily growing for 30years. In 1976, the richest 10 per cent of Canadianfamilies were making 31 times as much as thebottom 10 per cent. In 2004, that ration had increasedto 82 times as much.

In the meantime, thosebelow the top 10 per cent are working more hours fortheir income. Not only are most of us losingground, we are working harder to do it.

Those of us who lived in the '40s and '50s (orwatch DejaView on cable TV) may remember theoptimistic hype of the era that told us howmachines would take over much of our work,increasing productivity and giving us more timefor leisure activities. Technology would set usfree.

But, it did not come to pass. In herstudy published in 1991, Professor Juliet Schorof Harvard revealed that although productivityhas been increasing almost every year since1948, leisure time has been shrinking as hoursworked continue to climb. Instead of being used for more leisure, productivity, shesays, hasbeen directed to accumulating more profit.

Raising the minimum wage, if not accompanied byprograms to redistribute wealth from the topdown and close the gap between the highest andlowest paid, will be little more than a band-aidsolution, a temporary gain soon to disappear asour system of inequality swallows it up.

If we are to significantly improve the lot ofthose below the median income line, particularlythose on the bottom, then raises in theirincomes will have to come from the incomes ofthose on the top. Among other things, we need tobe considering higher marginal tax rates toprovide more services to the public, and incomesubsidies to low income workers to cushion smallbusinesses from the cost of increased wages.

Regressive economists who make a livingapologizing for the rich will tell you thatmaking people wealthy is good because a risingtide raises all boats. They obviously do notunderstand the tides or they wouldn't push thatmetaphor. Tides, as we know, rise in one placeas they drop in another. Some boats go up whileothers go down.

A simple examination of theincome spread in society will tell you which waythe tide is flowing. The challenge is to managethe flow so that it goes neither too high nortoo low.

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