Union greed in disguise: 'Living wage' shuts out small business

By Laura Jones. This bi-weekly column was published in 'The Province' June 3rd, 2010.

 

New Westminster city council should be ashamed of itself. It recently passed a policy that promises to increase property taxes for everyone and shut small businesses out of opportunities to bid on local contracts.

Municipal politicians in Maple Ridge and Pitt Meadows should give their heads a shake for considering following suit.

Those pushing this policy came up with a very enticing name for it: a "living-wage" policy.

The "living wage" effectively becomes the new minimum wage for city staff in New Westminster and anyone wanting to do business with the municipality.

How much are we talking about? The minimum wage in this province is $8 an hour. The "living wage" was last calculated at $18.17 an hour.

More than doubling the minimum wage is seen as credible policy.

Provincial politicians are smart enough to know that doubling the minimum wage would cause a massive increase in unemployment and make many people in this province a lot worse off.

If you are a municipal employee earning less than the living wage and now get paid more, you feel great. But what if you are on a fixed income and property tax rises to pay for the extra cost of those municipal wages?

And taxes will have to go up unless the city plans to lay some people off -- but I can't see that as being in the spirit of the policy.

What if you are the small business owner who wanted to supply muffins to the city cafeteria but you cannot stay in business if you pay your dishwasher $18.17 an hour? Most small businesses will be shut out of bidding on local contracts.

Since most people working for the city probably earn more than the "living wage," you may be tempted to conclude it's a stupid, fairly benign policy. Think again.

If the lowest wage is now $18.17, what does the person who was earning near that want now? The policy was rejected in Calgary after its city staff pointed out "a living-wage policy could fundamentally alter the city's approach to collective bargaining as the establishment of fair compensation is no longer determined by the labour market."

The living wage would set a new floor for wage negotiations, which would cause wage inflation -- paid for with more tax increases. Let's call the living wage what it really is, union greed dressed up in compelling words. Don't fall for it.

Laura Jones is vice-president of Western Canada for the Canadian Federation of Independent Business. She can be reached at laura.jones@cfib.ca.

 

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