Or one could enact a negative income tax combined with a guaranteed minimum income and abolish the minimum wage entirely (also welfare for the poor could be eliminated).

But that is, of course, too radical—and too brilliant—for a politician. Sigh.

Given the constraints I do like your minimum wage plus system.

Just a note: I don’t think it’s accurate to call somebody like Plawiuk (or myself for that matter) New Democrats just because we’re on the far left.

That said, your proposal is interesting. My only concern would be that corporations may take advantage of more economically disadvantaged regions/cities in this regard. If, for instance, a region in Northern Ontario wanted to set a certain minimum wage above the bare minimum, it is possible that the region/city would face threats from companies to relocate the already scarce business in the North to Southern Ontario. This isn’t to say that the proposal wouldn’t work (actually, I think it’s more likely that it would work), but it’s just a concern that came to mind.

under conditions of perfect competition and perfect information (which we’ve yet to see)

Oh come on, this has to be pretty damned close.

In your system, cities have to top up the minimum wage, according to the cost of living in their particular city? Where are cities to get this money? Municipalities only have one source of money – property taxes, and most cities are stretched to the limit to finance the things they need now.

Sally — no, municipal governments aren’t footing the bill, just like the province isn’t footing the bill for having a minimum wage. They simply require that companies located in their city pay a higher minimum wage, because the cost of living for employees is higher. The companies would bear all the cost, just like they do now with minimum wages.

Paul — I believe the differential minimum wage between urban/South and rural/North will actually help the rural/North areas. Under this system, it would be mostly the Southern and urban municipalities that have a higher minimum wage, not the North, where the cost of living is significantly lower.

From a company’s perspective, however, they might decide that having lower labour costs is significant enough to locate (i.e. invest) in the North, particularly if their business doesn’t physical demand them to be located in the GTA. So moving away from a one-size-fits-all minimum wage, to one that is calibrated to the costs of living acts as a incentive to attract investment in lower-cost (and economically disadvantaged) areas.

From an employee’s perspective, while the opportunity to earn a higher wage in the GTA (for example) might seem attractive, it is not in practice, because wages would be indexed to cost of living. So if the minimum wage is $9.67 in the North, but $13.67 in Toronto, does the extra $4/hr pay for the costs of living in Toronto? If wages are indexed to cost of living, yes, it would pay for the extra costs, BUT NO MORE. So, from the employee’s perspective, there is no incentive to relocate to Toronto. But there is an incentive for companies to relocate to the North (and thus bring new investment, and potentially stop the population decline we’re witnessing).

Your naming me as an NDP supporter is incorrect. I may lean toward the NDP but I do not support the Party. Party politics is frightful!

Thomas Walkom (Toronto Star) put it well when he said, “The question is not whether their remuneration is just. It is whether it accords with the principles of the global marketplace.”

If we remunerate work by the principles of market economics, we end up giving MPPs 25% pay raises while keeping the working-poor in poverty, which is necessary, because eliminating poverty would undermine the incentive structure that keeps people generating wealth for those who don’t deserve it.

Markets encourage remuneratation for bargaining power, property, and — to a degree — output that results in gargantuan disparities of income and wealth.

Market principles for remuneration are deeply flawed as they pit economic actors against each other, destroy solidarity, impose class division, mis-price public goods, ignore collective effects beyond direct buyers and sellers, violate ecological balance and sustainability, and have many other faults as well.

Tweaking or reforming minimum-wage within markets or even mixed economies won’t work when the system itself necessitates that a segment of the population remain in poverty.

To fix the injustice of what amounts to wage slavery, we need remuneration that’s based on principles that aren’t found in the marketplace, like effort, sacrifice and need.

Viable economies based on these principles exist in both vision and practice and can be found by those truly serious about addressing problems like poverty and the growing income gap between rich and poor.

If this sounds outlandish to apologists of poverty out there, just remember that the average Canadian CEO just surpassed the average Canadian wage for 2007 on January 2nd. Now that’s outlandish!

Hmm…

When I first read this proposal I was a little unsure about it; but, the more I think about it, the more I like it. After all, we New Democrats support increasing the minimum wage in order to ensure that all workers earn a living wage. But what constitutes a living wage is geographically relative. For that reason, it makes sense to adjust minimum wage accordingly.

As you point out, this sort of system provides incentive for economic development in rural and northern communities rather than just in Toronto.

It would be a little tricky to implement, and very controversial (although it might benefit smaller communities, it might be perceived as valuing the contributions of small town workers less than those in larger urban centres.) Moreover, it might have the effect increasing labour migration into larger urban centres. Although the higher cost of living cancels out the higher wage, I think that a lot of people wouldn’t really “get” that and migrate to larger urban centres seeking higher wages. The last concern that I have is about how the “plus” factor is calculated. Is it based on the worker’s residence or on the location of the workplace? This could be an issue because workers living in smaller communities outside of the jurisdiction of large urban centres can commute to work and reap the benefits of the higher wage while also enjoying the lower cost of living. This could potentially encourage sprol and long home-work commuting distances.

Maybe a good way of balancing some of those concerns with the min+ system would be to provide disproportionately large “plusses” to low cost-of-living municipalities compared to the more costly cities. In this way, although the minimum wage is still higher overall in high cost-of-living urban centres, the minimum wage in lower cost-of-living municipalities is not as sharply lower. That way, we retain some of the benefit of min+, but mitigate some of the concerns above.

Devin — one of my continuing crusades is to get policy-makers to think spatially when creating policies. It’s amazing that we continue to think that policies can be one-size-fits-all, without regard to the differences from region to region. The minimum wage is just one example.

I don’t think you should fear that people will leave rural/Northern areas for cities (if anything, the policy should slow the process by providing an incentive for companies to locate in low-cost areas). On average, wages are already significantly higher in urban areas. The price elasticity of labour is much less than the elasticity for companies. That is, companies are much more willing to relocate to cut costs (i.e. to make more money). People are less willing to do so; they have social ties (family, friends) to their communities and most recognize that the cost of living in urban areas, for low-paying jobs, will offset additional wages. And for minimum-wage jobs, this is even less likely.

If you took your thinking to its logical conclusion (i.e. that we shouldn’t vary the minimum wage across space) then you should argue for a single national minimum wage. Why should we have different minimum wages in different provinces? Because they have different circumstances. And if that’s true for different provinces, then it’s certainly true for different regions within provinces, no? Under globalization, policies are geared towards increasing a region’s competitive advantage over other world regions. Hence the desire to make the Toronto/the GTA into a “world city” (read last summer’s Conference Board report on their plan to invest in “hub cities” based on the false premise of trickle-down economics – that if Toronto gets rich, eventually so will Thunder Bay. But, it’s ridiculous because as regions die — and Thunder Bay is due to lose 1/2 its population by 2050 — it loses its per capita share of health, education, infrastructure, etc. In our efforts to position Toronto as a global region, we’ve left Ontario’s Northern and rural regions behind. The reality is, we need to start thinking regionally. This means taking advantage of each region’s unique characteristics and promoting economic development outside of the GTA — only through this can regions be self-sufficient (a basic requirement of economic sustainability). Regions like Thunder Bay and Sudbury had a lower cost-of-living advantage; we must take advantage of that in promoting economic development.

re: your second concern, I think the wage would be based on the location of the place of work. Would people choose to live further away to lower their costs? No more or less than people already do — that’s a fundamental truism of the urban land economy — land rent varies inversely with distance to activity centres. This only highlights the importance of spatial thinking for all public policies. Until such time that we repeal the discriminatory large-lot zoning practices that prohibit mixed-use and a wider range of housing options in peripheral areas, we will continue to have sprawl and traffic congestion. Besides, there is a limit beyond which it is impractical to commute, and if wages are set regionally then I don’t think you will see much change (that is, the differences in wages across the GTA will be lower compared to the differences between the GTA and the North, or rural Eastern or rural Southwestern Ontario, for example).

It’s clear that many people who work minimum-wage jobs, particularly in urban areas, are living in poverty because what they earn is out of whack with what it costs them to live. Calibrating minimum wages to costs-of-living is a policy that is long overdue.

several problems exist with you idea, some have been mentioned in the comments above, but one that has not is that no “Poverty line” in Canada actually exists.
See here : http://www.cbc.ca/news/background/economy/poverty-line.html

but, on the whole I think it is a good nucleus of an idea, that could be worked with to form coherent policy.

ACORN targets the poorest people for their $10 a MONTH, yes $120 a year, but they demand it be deducted monthly from your bank account “memberships”.

You can get real information for free from real activists like the Federation of Metro Tenants’ Association http://www.torontotenants.org

ACORN is a community union of low and moderate income Canadians. We organize for greater social and economic justice by building a mass based membership organization capable of fighting and winning on the issues that impact our membership. ACORN members (folks from low and moderate income communities) decide on campaigns we run, the tactics we use, and own the organization through their membership dues. Unlike other organizations that depend on grants from governments or foundations ACORN’s membership base allows us to be accountable to low and moderate income members first!

To learn more, check out:
http://www.acorncanada.org
http://www.thestar.com/comment/article/249635
http://www.insidetoronto.ca/News/Centre/article/30394

Negative comments above about ACORN are neither endorsed nor condoned by the Federation of Metro Tenants Associations. We have worked well with ACORN on such critical issues as landlord licencing.

Tenants are free to join (or not) ACORN and the Federation of Metro Tenants Associations.

Trying to pit us against each other is the work of the very strange allies of landlords.

Together we are strong.