'Where do you start?'
Tuesday, January 28, 2014
by SUSAN MANN
Ontario farm leaders are watching to see what the government will do with the Minimum Wage Advisory Panel’s report calling for the rate to be increased annually by the same percentage as the Consumer Price Index.
The panel, appointed by the Ontario government last June to review the process for setting the province’s minimum wage rate, released its report Monday. The current minimum wage in Ontario is $10.25 per hour. That rate has been in place since 2010.
Ontario Federation of Agriculture Mark Wales says the Consumer Price Index (CPI) has historically been increasing by one or two per cent annually. “It’s a relatively small number as far as that goes.”
But agriculture’s big concern is if the province adopts the model of annual minimum wage increases based on CPI, where “do you start?” Wales asks. He says it would be a problem if the government randomly increased the wage from the current rate and then started the annual increases based on the CPI because that would immediately kill jobs, especially in horticulture.
“That’s the part of agriculture that’s the most sensitive” to wage increases, he says.
Ken Forth, president of the Foreign Agricultural Resource Management Services, says annual wage increases don’t make sense in years when there are recessions, such as the one that started in 2008/09. “You’re just going to make it worse if you put a wage increase on there because everybody else at that point will be losing their jobs.”
If the economy’s not working okay “you can’t just hammer this (a minimum wage increase) on there every year,” he says.
He also says other jurisdiction’s wage rates need to be taken into account in setting Ontario’s rate because the North American market for many agricultural products, particularly fruits and vegetables, is integrated.
The minimum wage in California moved to $9 per hour on Jan. 1, Forth says, noting California is the most liberal, socially conscious place in North America and “we’re way higher than them. It doesn’t make a whole lot of sense to me.”
Ontario is starting to get out of touch with competing jurisdictions “that affects its market,” he adds.
Some social activist groups have been calling on the government to increase the wage to $14 per hour.
But Wales says just increasing minimum wage doesn’t help the working poor. The government can adopt other measures to help employed poor people, such as lower tax rates that enable people to keep more of the money they earn. The government can also look at other social programs to help people, such as housing, daycare and transportation. Those ideas “would be far more effective in dealing with poverty.”
In its report posted on the Labour Ministry’s website, the panel says the question of where the wage adjustments should start surfaced during the public consultations. The panel suggested an inflation adjustment could be applied retroactively to the 2010 level to account for cost of living increases since then.
The panel, chaired by Anil Verma and made up of representatives from business, worker, labour and youth groups, didn’t include a recommended level for the wage rate. That’s because the chair said in the report he interpreted the panel’s mandate was to focus on how future minimum wage rates should be set rather than recommending a specific wage rate. Other panel members thought the panel should set benchmarks that would “relate more directly to the level of the minimum wage,” the report says.
Verma says the panel held consultations in 10 cities across Ontario during which 92 organizations submitted written and oral presentations. Also, 340 submissions were received.
Based on the public feedback, “there was near universal agreement on making the process of revising minimum wages more transparent, predictable, fair and arms length from government’s own near-term concerns,” the report’s executive summary says. There was also broad agreement that the basis for revisions should be easy to understand and administer. BF