Bring back the federal minimum wage and reduce social inequality
September 26th, 2014 - 3:59pm
MPs have been back in the House of Commons for a few weeks and are clearly in pre-election mode, with the 2015 federal election less than a year away. Taking a direct and transparent approach, the NDP has begun to unveil several key planks in its election platform.
By sharing our election proposals early in the process, we let voters take all the time they need to debate and consider these ideas, rather than bombarding them 14 days before they go to the polls. One such proposal is to reinstate the federal minimum wage.
The NDP believes that the federal minimum wage should be increased incrementally to $15 an hour to help families make ends meet.
In 1996, the Liberal government scrapped the federal minimum wage as part of a broad program of cuts. What you may not know is that this move and several other poor political decisions have caused income inequality to skyrocket. In fact, 94% of the increase in after-tax income inequality over the past 35 years occurred under federal Liberal governments.
The federal minimum wage at that time was ridiculous. As a result of the Liberal’s decision, all employees in federally regulated jurisdictions such as the railway, transportation, banking and financial services, telecommunications, and broadcasting would be subject to provincial minimum wage rates, which were usually higher. Unfortunately, as shown in a recent Statistics Canada study, the average minimum wage increased by just one cent in real terms between 1975 and 2003.
In 2006, the Federal Labour Standards Review Commission recommended that the government reinstate the federal minimum wage and base it on Statistics Canada’s low-income cutoff (LICO). The Commission recommended setting the minimum wage so that a person with a full-time job was not living below the poverty line.
That’s exactly what the NDP plans to do. By making the federal minimum wage $15/hour, we hope to encourage the provinces to increase their minimum wage as well and help lift families out of poverty. There is solid empirical evidence to show that increasing the minimum wage significantly decreases income inequality.
People to the right of the political spectrum say that businesses will cut jobs if the minimum wage goes up. But reliable data show that, in general, modest increases in the minimum wage have no meaningful impact on employment. A moderate, incremental approach will help businesses plan and adapt.
Others, like Justin Trudeau, worry about the effect on the public purse but, here again, the impact would be minimal since most government employees already earn more than minimum wage.
The minimum wage affects primarily private-sector workers in federally regulated areas. The businesses in these sectors tend to be larger and benefit from regulatory protection. They should be fully able to adapt to a gradual increase in the minimum wage.
New Democrats believe that we need to take action now to build a fairer Canada, starting with a federal minimum wage of $15. Will you support our proposal?