A living minimum

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Ontario managed to raise the minimum wage by 75 cents to $11 per hour, leaving a full-time minimum wage worker not far from 20 per cent below the income poverty level. Is doing almost nothing now to be considered progress in what used to be one of the wealthiest jurisdictions in the world?

If you are serious about poverty reduction, replacing the minimum wage -- currently set everywhere across Canada at a level below what it needed to make ends meet -- with a living wage -- enough to bring all working Canadians above the poverty line -- makes utmost sense. 

No government is willing to legislate such a measure due to fear of reprisal from business lobbies; so, introducing living wages requires an employer to act. Vancity, the progressive credit union that built itself a comfortable market share competing against the big five chartered banks instituted that policy in 2011. Its example has proven easy for others not to follow.

In Vancouver it is common to see people sleeping on the streets. The election of a progressive mayor who pledged to attack homeless has made a difference, but has not resolved the issue for people who cannot afford a place to live. Three levels of government need to work together to make real change possible.

Poverty and destitution are results of decisions societies make about how to organize themselves. Providing a decent minimum income to every citizen is within reach. There is more than enough current income available to provide basic resources to every Canadian. In fact, in a deflationary economy such as exists today, providing such an income would boost overall income, and pay for much its cost.  

Lifting everybody up to a living minimum makes sense. You do not hear a lot of people who thinks it is best for a society as a whole not to do it. The problem lies with people  who think "best" means something else than meeting basic needs for every citizen citizens.

Marketeers say each citizen receives from society what they contribute to it. The extra amount received is measured in proportion to ones contribution to productivity gains. Rising inequalities, with disproportionate advantages accruing to the top 1 per cent have tested that proposition, which has decisively failed the real world test. Arguments in favour of the existing distribution of rewards are correspondingly weakened, which should make it more difficult to continue to make those arguments. However, those arguments continue to be made because they were based on prejudice rather than evidence to begin with.

How best to address inequalities? The Justin Liberals want to boost the middle class, the people who rise (or rose) by making the most of educational opportunities. A middle class agenda suggests help is on the way for those who help themselves -- not just those who help themselves to more than they deserve, about who we hear less from the Liberals.

Governments have the means to reduce inequalities by taking more in taxes from those who have more, and giving more in transfers to those who have less. Pertinently, no government currently holding office wants to talk about doing this, and Canadian governments have been doing the opposite for decades.

Undaunted by the political obstacles, Thomas Piketty, the French economist who in 2001 writing with his co-national Emmanuel Saez caused a stir  among economists  by identifying (and measuring with some precision) a crack in capitalism -- a growing share of the rewards are going to a shrinking number of recipients -- now is calling for a wealth tax to be applied in all leading capitalist nations in order to reduce inequalities.

A tax on current financial transactions, called the Tobin tax after the American economist James Tobin who first proposed it in the 1970s, could be introduced by the OECD countries to serve the same ends. It would provoke the same opposition.

In fact there is an alternative to redistributing wealth or income from rich to poor through taxation. It entails creating a basic income for every citizen. Such a measure is available, and would require not much administrative effort or policy innovation.

Making a monthly minimum available to all Canadians over the age of 21 would entail a major spending programme. As a CCPA report by Margot Young and James P. Mulvale showed, the size of that program would depend upon the level of minimum income established, and how current social spending programmes would be modified or replaced.

Separating income from work, which providing each citizen with a basic income as a right would do, scares some people, and worries capitalists greatly. Creating a basic income has revolutionary implications, which is why it tends to either be rejected outright, accompanied by howls of outrage, or watered down to insignificance.

Suppose that people did not have to take meaningless, crummy jobs just in order to survive, that no one need fear homelessness or starvation because food, lodgings, clothing, and access to recreation and culture were guaranteed by right, and that each month a guaranteed minimum was paid into the bank account of someone electing to take a citizens income.

How would hamburgers get flipped, goods get stocked, couriers and cleaners get hired?  Not by Canadians, at todays minimum wage, that’s for sure; in fact no minimum wage would be necessary, the market would determine what people would accept to leave the guaranteed minimum income. 

Why would people do paid work at all you ask? Not just to survive that’s for sure.

Eric Fromm argued  for a guaranteed income. He believed release from the fear of going without would "drastically enhance" individual freedom. Of course Fromm was a socialist. He sought freedom and equality for all, and thought it would be found through solidarity. 

Duncan Cameron is the president of rabble.ca and writes a weekly column on politics and current affairs.

Photo: flickr/twocents

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