Keith Ng who blogs at Public Address normally has a reasonably progressive attitude towards workers’ rights.
So I was surprised to see this post from him, in which he argues that the minimum wage should be frozen because the economic situation will result in job losses if it is increased. He suggests:
Increasing the minimum wage is not inherently a bad thing, but to do it now, when so many businesses and their employees are tethering on the edge is a seriously bad idea. The social harm done by the job losses would far outweigh the $20 or $30 it might mean for those other families.
Well, he might be right, if increasing the minimum wage significantly were to happen without any complementary measures.
But the reality is that many of the major employers who pay at or just above the minimum wage can well afford to pay more. No-one will convince me that the big players among low-wage employers (Progressive Enterprises, Foodstuffs, Restaurant Brands, McDonalds etc) can’t afford to pay their workers more. Raising the minimum wage won’t even affect the competitiveness of these big players, because their only competitors are each other.
Where Keith Ng does have a valid argument is with small and nascent business enterprises. They will struggle in the current economic climate to meet any significant increase in the minimum wage.
But the fair solution is not to deny workers a reasonable increase in the minimum wage, as Keith proposes. It is to increase the minimum wage substantially, like to $15 an hour, and to provide a transitional targeted Government subsidy to employers whose viability would be genuinely adversely impacted by such an increase.
A low minimum wage means that the taxpayer subsidises all low income workers through Working for Families and Work and Income supplementary assistance. A higher minimum wage, with targeted subsidies to employers who cannot afford to pay it, means that small employers maintain their business viability, while those like Progressive Enterprises pay their workers something closer to a wage they can live on, thereby reducing the taxpayer subsidy to low income workers.
Keith’s also commented more briefly, but along the same lines, at The Standard.
I’d be interested to see his response to my proposal.