Right in the centre - Making the right moves

Details

Published on Thursday, May 18, 2017

Ken Waddell

The Neppawa Banner

The PC Manitoba government is making some definite moves. Fortunately, most of them are moves the province needs. The latest is the rise in minimum wage. They are planning a 15 cent raise per hour on Oct. 1, 2017. Following that, wages will increase at the rate of inflation and that is a good thing. We have had constant and doggedly determined minimum wage increases for years with no regard to inflation or the employer’s ability to pay.

The NDP, and many others, argue that we need a $15 minimum wage. It’s obvious an arbitrary level, as $15 is the same wage being sought in California. The unions would love a higher minimum wage that they could use to bash employers to raise all other wages. The problem is that arbitrary wage increases don’t take into account inflation or anything else actually that may reflect the economy.

The proponents of a higher minimum wage and twice yearly wage increases don’t take a serious look at what happens when minimum wages are bumped up. Some of the increases goes to higher income taxes and employee deductions. Sometimes, employers find ways of reducing the number of workers or number of hours so as to lower the wage load on the businesses. Hours may be reduced or better equipment purchased. Hand labour may be replaced by bigger and faster machines. Kiosks and robotic service show up and that may cut down on labour costs and actual jobs.

There have also been cases where upward spiralling labour costs have forced business owners to cease operations. Businesses close all the time for various reasons, but labour costs are a big factor.

It would make a lot more sense, if a society and a government is truly concerned about lower income people, if the tax deduction threshold was raised. Manitobans pay taxes at a far lower income level than many other provinces and that adversely affects lower income people.

There has been renewed talk about a minimum income initiative. The 1970s’ Dauphin experiment has often been cited, where a minimum income was implemented for a few years. The topic keeps coming up, but it is a very complicated approach. What needs to happen is to determine the poverty level for an individual person. Once that is done, then the government should work towards not levying any federal or provincial income taxes against that level of income. Most people file income tax returns, so the government pretty much knows what everyone’s income is. If they fall below the minimum level, they get a rebate. 

That said, if a minimum income program comes into place, there would be no more social assistance payments.

All these wonderful things can be implemented but it will take a lot of thought and planning. It’s fine to implement a minimum income program, but do you do it for individuals or for families? Do you apply minimum income rules to both spouses and step it up depending on the number of children? Would minimum income eliminate child tax credits? Would minimum income be at a different level for different parts of the country? Would minimum income eliminate the need for subsidized day care? 

Would minimum income allow more parents to be stay at home moms and dads? That is happening a lot more as the cost of day care increases and the demand for spaces outstrips the supply. More and more families are leaving one parent at home as they consider the cost of day care, then all the extra costs of working outside the home.

Lots to consider both for individuals and governments but the key word is consider. If it is well thought out, a good solution can be found, be it at the individual or family levels or at a governmental level.