by Dr. Stephen G. Dinetz – Founder & Chairman of the Social Impact Capitalist Group & President of Economic Connections Institute
When the Ontario government recently voted to raise the minimum wage from $11.60 to $14 an hour, it didn’t do so because the average worker is living in poverty. It did so because the Ontario government is convinced that a minimum wage is the perfect employment program.
But the truth is, Ontario’s employment program has plenty of problems. More importantly, it’s getting worse.
Much of the problem is that the Government of Ontario is terrible at understanding economics.
Many of the people who are struggling to afford rent and food are, in fact, very well-paid professionals—with excellent educations and vast amounts of experience. As a result, they aren’t able to save enough money to buy a home or to put enough money aside in an emergency fund. Because they don’t have any savings to draw upon, they are forced to either move to the rent-controlled Downtown Eastside, where rents are outrageously high, or work multiple part-time jobs to make ends meet.
Ontario’s limited skills and high unemployment rate coupled with the Province’s artificially high minimum wage make it difficult for the “economists” to even understand these economic issues. At one time, Ontario’s overall population was about 25 million. Today, it is under 20 million. At the same time, the “establishment” estimates that Ontario has a ready-made pool of unemployed, so why should we have to pay more for the jobs?
What a waste of our talent, talents and creativity if that is indeed the case.
Perhaps the question is “Why don’t Ontario’s economists understand economics?” Because Ontario’s economists are the same ones who did the math to throw away 20 years of Liberal rule—at great expense to both the taxpayers and the workers.
Ontario’s Liberal leader, Kathleen Wynne, really ought to forget about a second term and resign. Do not waste your time and energy on her.
Instead, the discussion really should be on a living wage.
One of the keys to a prosperous future is a stable economy. But if Ontario’s employment program is not affordable, we must change course.
That is why we are introducing a living wage tax credit of $1,100 for families and $500 for individuals to help offset the real cost of living in Ontario.
This will ensure that a minimum wage of $14 an hour is the minimum support needed by workers—not a luxury to use as an excuse to reduce pressure on taxpayers.
We all know that the minimum wage has its benefits, but it is time for Ontario to consider shifting away from a minimum wage and towards a true living wage.
The living wage is an acknowledgment that the less comfortable a person’s situation, the greater responsibility his/her employer must bear when providing that person with a realistic wage. There should be no disposable labor.
The living wage is about fairness for all workers—regardless of the amount of education, experience or where that worker’s work takes them. It also addresses the issue of poverty that plagues so many in Ontario. It is based on a salary structure that is fair for all of our workers, not just a few well-paid professionals.
What would it take to transform the economy of Ontario and have it start looking like the economy of China?
The willingness of Ontario’s politicians to listen to and understand the realities of the Global North is lacking—and only likely to increase as the cost of living increases in Ontario.
The time to enact a living wage tax credit is now.
Stephen Dinetz is president of Economic Connections Institute and founder of the Social Impact Capitalist Group. Read his complete testimony here.