2018 in Ontario is a dawn without light. Premier Kathleen Wynne, drunk on hubris and desperation, has raised the minimum wage from $11.60 to $14 an hour. Small businesses everywhere have collapsed violently and capitalism has ground to a halt. I do not expect that anyone south of Collingwood remains alive to read this.
Just kidding. Things in Ontario are fine. The minimum wage going up is good news both immediately for workers and longer-term for the provincial economy. As Vanmala Subramaniam has written over at VICE News, fears of massive job losses in the wake of the minimum wage going up by roughly 20 percent are more or less unfounded. Good news for Canadian workers; cold comfort for the Tim Hortons franchisees overwintering in Florida with nothing but contempt for the poor to warm their hearts.
Some headlines warned that the Bank of Canada was forecasting a loss of 60,000 jobs, but this appears to be something of a sleight. In addition to projecting that 60,000 fewer jobs (roughly 0.3 percent of Canadian employment hours) could be created nationally as a result of minimum wage increases across several provinces, the report also observes (on pages five and six) that despite this possible dip in the creation of new employment, “On net, … real labour income should be higher following the implementation of these measures relative to otherwise. This is because the 0.7 percent increase in the level of aggregate real wages more than offsets the 0.3 percent decrease in total hours worked.” (If this piques your interest, Michal Rozworski at Political Eh-conomy takes a good close look at both the contents and methods of the Bank of Canada report, as well as the reporting about the report.)
Meanwhile, a 2016 report from the National Employment Law Project studied seven decades of federal minimum wage increases in the United States and found that there was no correlation between those increases and lower employment levels. (In many cases, they found that overall employment actually increased following a minimum wage hike.) Closer to home, a 2015 report from the Canadian Centre for Policy Alternatives on the impacts of raising the minimum wage in British Columbia concluded that the benefits of a wage hike would far outweigh any potential drawbacks—which would not include widespread or even meaningful job losses.
Economic forecasting is as much art as science. But all the tea leaves (and meta-studies, and the minimum wage increase in Alberta) so far suggest that everything will be fine.
But the operation of an advanced capitalist economy is characterized less by the rational administration of the production/distribution/consumption process than a mad scramble for money across a brutally uneven playing field. For all the entrepreneurs motivated to open a small business by meeting a need in their community, there are also a good many bosses whose sole drive is an undying and intensely petty power trip. (Some pretty wild stories will probably come out of the minimum wage workplace ‘bully’ hotline set up by the Ottawa District Labour Council last week.) And unlike other input costs against which Ebenezer’s children can only rage in silence, the state-mandated minimum cost of labour is an area where the militant business lobby can flex its political muscle.
It’s grown quite strong over the years, especially in cases when we start talking about the “unskilled labour” of minimum wage work, which often seems to be code for “the deserving poor.” Society is a pyramid, you see, and it’s important that those on the bottom have just enough of a rough time that it motivates them to better themselves. Otherwise they might settle for the humiliating and degrading existence of trying to make a living by doing one of the many basic and indispensable jobs that society requires to function, which is outrageous.
I am being flippant, but not by much. Just revisit the way the above-cited Bank of Canada report was covered by many mainstream outlets. Or read Robyn Urback’s smug dismissal of efforts to raise the minimum wage as a fool’s errand by the misguided activists Fighting for 15. Of course business will strike back ruthlessly against any effort to hurt its bottom line: that’s just business, that’s what it does. Business isn’t a social creature. Business is a force of nature, a bloodthirsty bear god who will eat us all if not appeased. Markets are like the so-called savage beast; a bundle of nerve endings and instincts, wild and uncontrollable but basically predictable. You can’t reason with it or fight it. You just have to accept it.
Everybody knows businesses will react to rising labour costs by sticking it to employees. Everybody knows that raising the minimum wage is bad for the economy. Everybody knows that the government needs to adopt the “smart but tough-to-sell policies (such as indexed wage hikes or targeted tax benefits)” I learned about in school but everybody also knows that they never will because the credulous masses love sexy and dumb ideas.
Everybody knows this, so we don’t have to think about it too much about it. Nevermind that they did in Alberta and everyone survived.
Ideology is one hell of drug, folks. But that’s alright. The minimum wage is going up and it’s all going to be OK. If a few petty donut-shop tyrants or my digital columnist colleagues want to insist that the sky is going to fall because the guy serving you coffee at three in the morning is getting paid 14 bucks an hour to destroy his circadian rhythm, that’s cool too.
As the saying goes: what they don’t know won’t hurt them.