(Author's note: This editorial was originally published in Canada. Its general premise, however, is universally applicable. BC is the province of British Columbia, and MLA is Member of the Legislative Assembly, BC's governing body. The governing party is the BC Liberal Party, a neo-conservative party. The opposition party is the New Democrat Party, a democratic socialist party.)
Recently the provincial opposition proposed that the minimum wage in BC be raised to $10 per hour from $8 per hour. Not surprisingly the government and its owners in the business sector opposed any such idea, even though the minimum wage has been frozen since 2001 while the cost of living continued to rise.
Meanwhile, this same government appointed three of its affluent friends to research the pay of MLAs and make a recommendation on MLA compensation. Not surprisingly, these hand-picked citizens recommended a pay increase for MLAs, a 29 per cent increase plus increases in benefits and extra pay.
The base pay of MLAs is $76,100 per year. A 29 per cent pay raise would be over $22,000 per year, an amount that is roughly the same as a full year's income or more for half of the workers in the province. It is considerably more than the annual wage of a full time minimum wage worker at the current rate, and still more than most if the rate was raised to $10 per hour.
And we haven't even thrown in the increases in benefits yet, or the higher increases for the premier and cabinet members.
On the issue of the MLA pay increase one must ask by what moral standard can a governing party that has consistently fought wage increases in the public sector to the point that it has broken contracts and imposed austere settlements, and which refuses to address the sub-standard income level at which the minimum wage is set, find itself deserving of such a fat increase in its own income? Perhaps the answer is that they have no morals.
One must also question the morals of the business sector that resists the idea of paying a livable minimum wage while at the same time opposing taxes to provide social services to those whom they keep in poverty.
On the issue of the minimum wage one must ask will increasing it solve any problems? If an increase in the minimum wage causes an increase in the cost of goods and services which in turn puts pressure on everyone else to seek an increase in income which in turn causes further rises in costs, what is gained?
The real problem we are facing is not just low wages at the bottom of the spectrum, it is also more profit at the top. For a number of decades we have been caught in a situation where top incomes have been rising by a much larger amount than the average and lower incomes. We have an economic system that is concentrating wealth in too few hands, a system in which most of us are losing ground.
In Canada the gap between the rich and the rest of us has been steadily growing for 30 years. In 1976, the richest 10 per cent of Canadian families were making 31 times as much as the bottom 10 per cent. In 2004, that ration had increased to 82 times as much.
In the meantime, those below the top 10 per cent are working more hours for their income. Not only are most of us losing ground, we are working harder to do it.
Those of us who lived in the '40s and '50s (or watch DejaView on cable TV) may remember the optimistic hype of the era that told us how machines would take over much of our work, increasing productivity and giving us more time for leisure activities. Technology would set us free.
But, it did not come to pass. In her study published in 1991, Professor Juliet Schor of Harvard revealed that although productivity has been increasing almost every year since 1948, leisure time has been shrinking as hours worked continue to climb. Instead of being used for more leisure, productivity, she says, has been directed to accumulating more profit.
Raising the minimum wage, if not accompanied by programs to redistribute wealth from the top down and close the gap between the highest and lowest paid, will be little more than a band-aid solution, a temporary gain soon to disappear as our system of inequality swallows it up.
If we are to significantly improve the lot of those below the median income line, particularly those on the bottom, then raises in their incomes will have to come from the incomes of those on the top. Among other things, we need to be considering higher marginal tax rates to provide more services to the public, and income subsidies to low income workers to cushion small businesses from the cost of increased wages.