I bring this up now, despite the provincial and federal government's refusal to raise Canada's minimum wage.
Now, even as I write this sentence, I know it is important to clarify. Minimum wage is under provincial jurisdiction. In Ontario, the McGuinty Liberals have professed to support the goal of a $10 an hour minimum wage but can't promise that we'll get there soon. To his credit, however, the current minimum wage increase (from $7.75 to $8 at the beginning of February) is the fourth increase in the provincial minimum wage since the McGuinty Liberals took office in 2003.
But a provincial government's commitment to a living wage does not justify a wage increase. What justifies the increase is statistical analysis.
In the USA, where the same arguments are taking place regarding living wages, analysis is now being done on the impact of living wage increases.
One study is out of LA - the venerable California destination that is home to disparity and large population shifts.
The study, titled Examining the Evidence, was conducted by David Fairris (Department of Economis at the University of California Riverside), David Runsten (North American Integration and Development Center, University of California Los Angeles), Carolina Briones (Los Angeles Alliance for a New Economy), and Jessica Goodheart
(Los Angeles Alliance for a New Economy).
The study is introduced as the "most definitive analysis of a living wage law’s impact on workers and employers. It provides important new insights on the effects of living wage policies, which have been adopted by more than 120 local governments
around the country."
It continues by providing a bit of history on living wage:
Living wage laws set wage and benefit standards for companies that do business with the government, such as service contractors, as a means to improve the quality of contracted jobs and increase the standard of living for low-income workers.
The first living wage law was passed in Baltimore in 1994. Over the past 11 years, many of the largest cities in the country, including New York, Boston, San Francisco and Chicago, have passed living wage laws, as have scores of smaller cities.
In 1997, Los Angeles became one of the first major cities to pass a living wage law. The ordinance currently (as of 2004–2005) requires firms to pay either $10.03 per hour, or $8.78 with a $1.25 per hour contribution to health benefits, and to provide 12 paid days and 10 unpaid days off per year.
Despite the grumblings of business and the concern of free-market advocates, this study found:
* The Los Angeles Living Wage Ordinance has increased pay for an estimated 10,000 jobs, with minimal reductions in employment.
* The number of jobs where pay was increased is among the largest in the nation, after New York and San Francisco.
* Although the living wage has not prompted firms to set up health benefits plans, some firms have improved their existing plans or extended coverage to more workers, affecting 2,200 jobs.
* Most workers affected by the living wage are poor or low-income.
* Most firms affected by the law have adapted to the living wage without eliminating jobs. Employment reductions amounted to one percent of all affected jobs, or an estimated 112 jobs.
* Employers have recovered some of the increased costs of the living wage through reductions in labor turnover and absenteeism.
* Firms have adapted to the remaining costs in a variety of ways, including
cutting fringe benefits and overtime, hiring more highly trained workers,
cutting profits and passing on costs to the city or to the public.
* While workers and their families have experienced measurable gains from the
living wage, a significant minority still lacks health benefits and relies on government assistance.
I highlight the report findings as, I believe, they provide strong and ample evidence that the fears proferred by living wage critics do not, in practice, occur. In fact, a living wage appears to offer multiple benefits. Not only are the working poor provided a better standard of living, but the absentee and turnover rate of these low-paying jobs appears to be reduced and the standards of employee treatment (and employer treatment) is increased. The evidence, then, is that the job reductions produced by living wage increases are vastly minimal, at best. The majority of workers (and companies) appear to benefit from a living wage.
Just a little food for thought, particularly in the face of fear-mongering headlines.
To read more on the study go to:
http://www.losangeleslivingwagestudy.org/
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