More Than a Wage Increase

Did you know that wages haven’t increased beyond inflation since 1970, even though productivity has risen significantly? There have been wage increases, of course, but they are merely linked to price increases, making for an illusory increase in purchasing power.

Some of the reasons for this economic situation are global competition, the weakened state of labour unions and neoliberal discourse. The inevitable consequences of this new economic model for workers are a rise in the income gap and dwindling domestic demand for goods and services.

The state of poverty in Quebec is shameful. How is it possible that 40% of people living in poverty are working people? A number of studies have shown that the minimum wage is not a viable, adequate, living wage. What is really needed is a minimum wage of $15 an hour to support the real cost of living. In Quebec, one in five people earns a salary below that.

We aren’t the only ones worried about the rise in poverty. Many Americans, tired of this sorry state, have joined the Fight for $15 movement in the United States. Their support and energetic mobilization have meant that 22 million people in 300 American cities have seen increases in their wages. And the movement has swept 60 countries on six continents.

In Canada, the actual name of the movement is Fight for $15 and Fairness. It has resulted in tangible measures to increase the minimum wage in Ontario, Alberta and British Columbia.

The clear sponsors of the movement here are the Fédération des travailleuses et travailleurs du Québec (FTQ) and the Collectif pour un Québec sans pauvreté. And the Fight for $15 has the support of Alexandre Taillefer, a prominent Quebec businessman who has used his large Facebook following to champion the increase.

A successful outcome for this struggle would be positive in a number of ways. First, the high marginal propensity to consume that is characteristic of low income earners means that their participation in the economy is largely beneficial. IRIS estimates that additional benefits in the amount of 3.4 billion dollars would follow an increase in their salaries and wages.

But a minimum wage of $15 an hour is much more than an economic measure: it takes on the force of a social measure as well. Socially marginalized groups are overrepresented in employment of this kind, and women account for 59% of this employee pool. A higher minimum wage thus goes hand in hand with the labour market equity initiatives we’ve seen in recent years.

Minimum-wage progress has indirect consequences, too. Canada’s Public Health Agency ranks income as the key determinant of health. Improving people’s economic condition would thus achieve savings in certain policy areas such as health.

Some, however, fear adverse effects on our economy. Would the change significantly affect the prices for consumer products? In fact, labour is only a small portion of total costs, and studies by IRIS and Daméco estimate the inflationary impact of such a measure at one to two percent.

Others anticipate dramatic job losses, but the case of British Columbia gives the lie to this irrational fear. In 2012, the province increased its minimum wage by 28%. The Fraser Institute prophesied at the time that it could cost 52,000 jobs. In fact, a mere 3,800 jobs were lost in the wake of the wage hike.

A comprehensive view of the issue prompts more mature reflection. The Fight for $15 movement is international in scope and has been successful in many other countries. The measure undoubtedly encompasses a slight element of risk, but increasing the minimum wage to 15 dollars an hour is clear progress on two fronts: economic and ethical.

PSAC-Québec supports the FTQ’s contribution to this struggle to improve working conditions for all workers. We intend to lobby Ottawa and Quebec City to increase the minimum wage to 15 dollars an hour.