Thursday, June 2, 2011

Two-tier minimum wage

As expected, the province announced it would increase the minimum wage yesterday. The new minimum (as of September 1) will be $9.40 an hour, unless you serve liquor (then it will $9.05).

The minimum wage will then increase each year based on an indexing formula. Although the liquor-serving wage will not move until the reqular wage is $10.05 and thereafter the $1 an hour disparity will be maintained.

On the one hand, this increase is good for low-wage workers. It restores their buying power to what it was more than a year ago when the Minister froze a planned increase. It does not nothing to address that the minimum wage is difficult to live on but maintaining buying power is a laudable benefit for these workers.

That said, these workers would have been better off if Minister Lukaszuk had never interfered with the existing system of increases in the first place. The 17-month delay in the increase is inexcusable. In effect, these low-wage workers (mostly women) subsidized their employer's profit through forgone increases during this time. There is no back pay provided for these workers for the time they went without while the government twiddled its thumbs.

And, under the old system, those who serve alcohol would not be getting a lower wage. The official explanation for the two-tier system appears to that those who serve alcohol receive more tips thus need a lower wage. We seem to be straying here into strange territory, where the government is saying not only what the minimum wage should be, but also what the maximum wage should be. If someone works hard and hustles for tips, why should they be penalized by the government with a lower wage?

No, really. Why?

One explanation is that the restaurant and food services lobby in Alberta has pushed hard to reduce the minimum wage for servers. Simply, this system reduces reduces their labour costs. They orchestrated a laughable write-in campaign last fall. They have also met with the Minister (here's a nice pic from their website):

And they've met with the premier and gave him a spiffy jacket:

There is no hard evidence that anything untoward has happened here. (Although the Edmonton Journal is reporting that the Canadian Food and Restaurant Association is not a registered lobby group...). Businesses lobby. So do workers.

It is interesting, though, that businesses get to meet the Minister and the Premier and then policy outcomes go their way. Even though a legislative committee stacked with conservative members clearly rejected this approach last fall. By contrast, labour leaders are refused meetings and policy goes against them.

It will also be interesting to follow the conservative leadership race. Minister Lukaszuk is expected by many to declare his candidacy. If he runs, will his list of supporters include members of the restaurant and food services industry? If he runs, will he release his list of donors? This kind of transparency will go a long way towards restoring my faith balanced public policy making.

-- Bob Barnetson

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