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The truth about 'small buiness' and the minimum wage


May 31, 2014

Tomorrow the minimum wage in Ontario is going up to $11/hr, thanks to pressure from a grassroots campaign, but that still leaves workers in poverty--which even the NDP justifies out of support for "small business."
 
As the Workers’ Action Centre pointed out however, a wage of $11/hour will still keep minimum wage workers at approximately 16 per cent below the poverty line.
 
Premier Wynne was quoted in January saying “I know that there’s a call for $14 (but) we have to move very carefully, because this is about making sure that we retain and create jobs.” Ontario NDP leader Andrea Horvath was quoted in early February saying “Well, look, I respect the work of the grassroots movements that have been calling for the $14 minimum wage, but I think our role right now is to consult with families that are affected, as well as small business particularly that’s also affected.”

The Ontario NDP announced in March that they will be proposing a $12/hour minimum wage to be instituted by 2016, a rate which would then be indexed to inflation. As pointed out previously in Socialist Worker not only is there virtually no difference between the Liberal and NDP proposals, but the ONDP plan would still keep the minimum wage well below the poverty line, which for 2014 sits at $13.18/hour. By 2016, when the ONDP propose the minimum wage would be $12/hour, the poverty line is projected to be up to $13.66. Clearly the NDP proposal is not good enough.

“Small businesses” profiting from poverty wages
The notion that we can’t have a non-poverty minimum wage because we have to protect small business is nonsense. According to Statistics Canada’s Perspectives on Labour and Income, published in 2010, the sector of the economy that had “by far the highest incidence” of minimum wage jobs was accommodation and food services. This is a sector dominated by large corporations like McDonald’s, Tim Hortons, Marriott hotels and Revera nursing and retirement homes. The retail sector, another significant employer of minimum wage workers, is increasingly dominated by large multinationals like Wal-Mart, Target and Gap. These are companies that can easily afford to pay their workers higher wages—Wal-Mart had total revenues worldwide of US$466.1 billion in 2013; Tim Hortons, a small company by comparison, had revenues of C$3.225 billion in the same year.  
 
ONDP leader Horvath seems to want to raise the spectre of the Mom-and-Pop convenience store driven out of business because of having to pay their staff higher wages, but it’s clear that the main beneficiary from this stance will be massive multinationals, not Mom-and-Pop sandwich shops.
 
Ironically for Horvath, both the Ontario Convenience Stores Association and the Ontario Chamber of Commerce told the Toronto Star that they support indexing the minimum wage to inflation. As Beixi Liu of the Workers Action Centre recently told socialist.ca, increasing the minimum wage to $14/hour would not only be good for individual workers, it would be good “for the economy, the community and business” because it would generate approximately $5 billion in economic stimulus that would be spent in local businesses, due to workers tending to spend their increased wages rather than hoard them.  
 
So when the Ontario NDP says that we need to consult small business in order to proceed on raising the minimum wage, all they’re achieving is providing cover to massive and profitable companies in their refusal to pay workers properly.

Pay equity
In addition, according to Statistics Canada, just over 60 per cent of minimum wage workers are women. The pay gap between men and women workers in Ontario is currently just over 30 per cent, meaning that on average women need to work thirty percent more hours than men to be paid the same amount. Given that a substantial majority of minimum wage workers are women, raising the minimum wage to a non-poverty wage would be a major contribution to closing the pay equity gap.

It’s long past time for corporations to be compelled to pay their workers better wages, and it’s long past time for women to be paid equally with men. It’s time for a real raise to the minimum wage.
 
For campaign updates visit raisetheminimumwage.ca
 
If you like this article, register for Marxism 2014: Resisting a System in Crisis. Sessions include "Why is capitalism in crisis," "The NDP and the crisis of social democracy," and "Rebuilding our unions: a rank and file strategy."

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