In this Corner -- Minimum Wage
Author:
Victor Vrsnik
2000/09/12
Who says nothing ever happens in Sleepy Hollow? After the provincial election, Manitoba has suddenly become the nation's foremost laboratory for experiments in economic and social engineering.
Take for example the government's heavy-handed meddling in labour relations that scrapped the secret ballot during union certification drives. Another law sidelined taxpayers during election campaigns with advertising limits. To add insult to injury, "taxpayers ability to pay" was stripped away as fair justification to control education spending.
All eyes are on Manitoba as the government marches forward with its anti-taxpayer agenda on assault on the business community. This summer's flurry of legislation is likely just a dress rehearsal for more fun to come.
The next bitter pill to be forced down the throats of business will be annual minimum wage hikes. As a policy it's worthless. But as a strategy to take the heat off government's punishing taxes on the working poor by scapegoating the business community, it's priceless.
Only recently have the higher-evolved labour organizations come to realize that pinning their woes entirely on business is futile. Trucker unions in the U.K., France and other countries are demanding government cuts to high fuel taxes instead of wasting their breath bashing the oil companies.
Hammering government instead of business represents a monumental shift in union mentality and strategy. Somewhere along the way, unionized Euro-truckers have experienced their very own conversion on the autobahn to Damascus.
Closer to home, the head of the Canadian Labour Congress, Ken Georgetti, championed rank and file workers with calls for income tax relief. He said that Ottawa should "significantly raise the threshold at which workers start to pay tax." He goes on to note that such a move would "give a tax break to everyone."
Anther friendly tax cut advocate is NDP Premier of Saskatchewan Roy Romanow who outstripped some Conservative-run provinces with generous tax cuts. Even Linda McQuaig - celebrated journalist and darling of the left - today trumpets the far-reaching benefits of a GST cut.
A general consensus is beginning to form among taxpayers, politicians, union bosses and opinion leaders that the working poor are best served with a tax cut, not molecular-sized wage hikes for the lowest income earners. A far better slogan for the labour movement today would be "get a raise, cut taxes!"
Tinkering with the minimum wage now and again won't add up to a pile of beans for the average low-income employee. Besides, the impact of provincial bracket creep (a policy preventing personal exemptions and income tax brackets from keeping pace with inflation) has already eroded past increases to the minimum wage. The left-leaning Caledon Institute figures that bracket creep has pulled more than one million low wage workers into the income tax net.
If the provincial government were sincere about helping the working poor, meaningful tax reform would be on the agenda, not rinky-dink minimum wage hikes that pay for little more than an extra cup of coffee a day.
The first order of business for the Doer government is to root-out bracket creep by reindexing the tax system to inflation - ensuing Manitobans get full purchasing power for the dollars they earn. Secondly, boost the basic personal exemption from $7,231 to a whopping $12,000. Minimum wage earners in Manitoba would be exempt from paying any income tax at all. Finally, give all Manitobans a break with a single tax rate of 11%.
The savings from such a tax reform model would outstrip the microscopic increases from minimum wage hikes and go a long way to making Manitoba a more competitive province attracting investment and decent-paying jobs.