Tuesday, January 02, 2007

On benchmarks

Jason Cherniak's position against a reasonable boost to Ontario's minimum wage has been rightly slammed today. But there's another point which seems to have been missed so far: even Cherniak's own precondition for the proposed raise is one that has been met if one looks at the issue fairly.

According to Cherniak:
If you want to convince me to support an increase in minimum wage, then convince me that profits have grown by 25% without an equivalent growth in wages over the past year or two.
Now, I presume that Cherniak is well-enough informed to know that the need for a boost in the minimum wage isn't based solely on the last two years. I presume further that Cherniak wouldn't much want to have to defend Mike Harris' record of inaction on the minimum wage. Of course, if that's wrong, then I'll encourage him to show just how little difference there sometimes is between staunch Libs and Cons when workers' interests come into play.

That preface aside, let's look at how Ontario's minimum wage has changed compared to its corporate profit levels over the last decade for which data is available (1995-2005, since Ontario's economic data goes only to 2005). As inflation should affect both figures equally, I presume it doesn't need to be included in the equation. (But in case you were wondering, the consumer price index has increased by roughly 23% over the decade.)

The chart below includes four columns: the year, the actual minimum wage, the corporate profit level, and the minimum wage if adjusted to match the increase or decrease in corporate profit levels.

Year - Min(Act) - Profits - Min(Adj)
1995 - $6.85 - $33.1 Billion - $6.85
1997 - $6.85 - $37.5 Billion - $7.76
1999 - $6.85 - $49.7 Billion - $10.29
2001 - $6.85 - $49.3 Billion - $10.20
2003 - $6.85 - $56.9 Billion - $11.76
2005 - $7.45 - $64.4 Billion - $13.33

In other words, if the minimum wage had actually been adjusted by Cherniak's suggested benchmark over the past decade-plus, the minimum wage would have exceeded the $10/hr which Cherniak now considers unreasonable as early as 1999, and would currently be well in excess of $13.

Not that I expect Cherniak to continue referring to corporate profits as a measuring stick once the numbers show just how far behind minimum-wage workers have fallen. But the real numbers show clearly that there's an awful long way to go to make up the ground that Ontario's workers have lost. And if the Libs really don't see anything out of whack about a minimum wage that's still far below even inflation over the past decade (let alone corporate profit levels), then that should say all we need to know about their lack of respect for workers.

Update: And the goalposts have been moved.


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