Here's a bit of good news. Yesterday, Ontario premier Dalton McGuinty told Ottawa business leaders that he's considering axing an increase in the minimum wage scheduled for 2010.
The minimum wage will rise as scheduled this Tuesday, by 75 cents to $9.50 an hour. The 2010 increase would raise the minimum wage another 75 cents, to $10 an hour.
The Toronto Star reports today in a front-page story that McGuinty explained his dilemma by saying, "Like all prudent business managers we have to take into account ... what's happening to the economy as a whole."
I agrees. Governments must be especially frugal about using their power to legislate contracts between private, independent parties.
When the economy is going well, yes, let’s share some with the young people and the recent immigrants, who are the most common beneficiaries of minimum-wage legislation. But when the economy is tanking and bankruptcy rates rising, why would any sane government load any more burdens on the small businesses and marginal retailers who are the most common employers of minimum-wage workers?
Look at the history. Minimum wage rose by 75 cents to $8.75 just a year ago. That’s a 9.4% increase. I wish someone would legislate me a 9.4% raise.
The three annual increases announced a year ago amount to a 35% increase in two years – a ridiculous burden for employers in good times, and economic suicide in times like these.
Kudos to the government for reconsidering. There is nothing wrong with admitting a mistake.
I am particularly disappointed with the response of Progressive Conservative MPP Tim Hudak, who used this welcome acknowledgment of uncertainty to score cheap political points. Hudak, considered the front-runner in the current PC leadership campaign, called McGuinty's statements "a broken promise," according to the Star. "Page 38 of the Ontario budget papers talks about the minimum wage increase, and now, less than a day later, they're backing away."
If Hudak wants to head a common sense, pro-business party, why not welcome the review? If he needs to be negative, Hudak could have pointed out the insanity of a 35% increase in two years. But to make it so hard for a government ever to admit it might be wrong is a mistake, a disservice to voters and taxpayers.
I will leave it to the neo-cons to explain why every increase in the minimum wage is a blow against the poor. I will only point out that if grown adults with marketable skills are still working for minimum wage, there is something seriously wrong. And we should not be redistributing funds from hard-pressed, innovative entrepreneurs to encourage those underachievers.