Let’s face it, the only way we’re able to buy many items at affordable prices is on the backs of workers who don’t have the same minimum wage as we do.
We live in a time in North America when items such as clothing are cheaper than ever and are, for the most part, made in parts of the world where the minimum wage is low enough to allow the cheap prices. This maximizes profits for businesses, which is celebrated by those in the industry, and keeps consumers happy with a false sense of value.
The truth is that if these countries decided to increase their minimum wages, it would create a need for these companies to move to lower wage paying countries, or increase the cost of the goods. At some point workers who make peanuts for money compared to what we’re seeing in this part of the world are going to demand equitable pay.
That’s probably years down the road, however, because of the poverty rates around the world. According to the United Nations Sustainable Development, 767 million people live below the international poverty line of $1.90 per day.
Alberta’s minimum wage is set to increase by $1.40 per hour in October. When one compares the two numbers it’s hard not to be astounded considering the per day/per hour difference. I’m guessing that many of these people will work for whatever they can get just to be able to eat; I know I would.
In South Africa a national minimum wage of R 3,500 per month (about $354 CAD) has recently been set. It’s interesting to note that the very same arguments of a minimum wage increase hurting the Alberta economy are being thrown around in South Africa.
Exactly the same.
There are differences of course; South Africa has a huge unemployment problem and there is an extremely wide disparity of wealth in the country with the majority of the population living below the poverty line and a small per cent making the money.
But the argument that a minimum wage will hurt the economy has a certain amount of truth. One of the main reasons is that businesses will have to adjust practices to ensure they are profitable, which may hurt the workers.
It creates some uncertainty for a business but also for the employee, who knows that they may not have a job, or as many hours, or as many benefits once the new minimum wage is set.
Does a minimum wage increase hurt the overall economy? Does it benefit the employee?
Determining the truth of either side is difficult with left wing and right wing think tanks providing statistics and data to prove their side of the coin. Granted, statistics are important to confirm a point, but at some point one must look at the human impact on a long term scale.
Equally difficult to determine is what it takes to live comfortably in any one place for one month. I’m guessing one of the big factors that affects a poverty line is the minimum wage, which in turn affects the cost of goods, which in turn affects the profits for a business.
How businesses are governed or the rules that allow a business to function, including how they are taxed, have to be included in the discussion of minimum wage, if not, implementing a minimum wage is not going to do anything to help the economy.
This is the second part in a series.
Correction:
Last week’s editorial stated that the current Alberta minimum wage is $15 per hour. The current Alberta minimum wage is $13.60 per hour with the province pledging to increase it to $15 per hour this October. We apologize for the error.