Create opportunity, not regulations
Author:
David Maclean
2005/01/11
Two major issues have dominated Saskatchewan politics of late: the minimum wage review and the proposed "available hours" regulations. Both of these issues reflect an effort by citizens and our provincial government to help individuals struggling in entry-level jobs make a better living.
While noble, the problem for low-income earners is largely a lack opportunity, and not a lack of government regulations or a legislated increase in the minimum wage.
The government approach to creating more full time jobs here is to force employers to distribute work hours to most senior part time workers. Problematic is the view that part-time workers are forced by "predatory" employers to live on a part-time salary. The reality is that on any given day, a part-time employee can walk down the street and apply for a full-time job at another firm.
The government admits that the potential pool of workers these regulations would benefit is as small 5,000. Plus, many of those workers are perfectly happy with their part-time work arrangements.
A review of the minimum wage currently underway also seeks to make life easier for low income earners. However, like the proposed "available hours" legislation, raising the minimum wage doesn't help create opportunity in Saskatchewan, and in fact could very well result in fewer jobs.
A minimum wage job is a starting point, not a career destination. Most minimum wage earners don't earn that wage for long, and if they do, they have the option of shopping around for a better paying job.
That said, there are those in society who find themselves in the position of holding a part-time or low paying job, struggling to make ends meet. We are not going to alleviate the hardships of those people with the heavy hand of government regulation, or by forcing businesses to pay their employees more.
The first thing we need to do is address the lack of opportunity. The problem is not a lack of labour laws (which are some of the most restrictive in North America), but the fact that Saskatchewan over the past decade has the worst job creation record in Canada. Last year, we saw job growth of only 0.7 per cent. A year, ironically, that government officials herald as a sign of a turnaround in the province.
We need to encourage business growth in Saskatchewan, and there is a laundry list of things we can do to make that happen. First and foremost in the minds of most economists is our corporate capital tax, which is one of the highest in Canada. If we're serious about creating jobs, and eliminating the needs for "available hours" legislation, we need a long term plan to reduce the capital tax and other business taxes in an effort to stimulate job growth.
Forcing businesses to distribute available hours to existing employees means taking away part-time jobs from the many students (who are often getting their first taste of job experience) and seniors.
A full-time employee earning the current minimum hourly wage of $6.65 grosses around $12,500 a year. Of every dollar earned over $8,404 the government takes 11 per cent. That's right, the government takes a piece of the paychecks of the working poor in Saskatchewan, while forcing businesses to pay a minimum wage.
The province should look in its own backyard before looking to businesses to help meet social objectives. In Alberta, that same $6.65 worker can earn $14,500 before paying a dime in provincial income tax. A strategy to alleviate suffering by minimum wage-earners is incomplete without a plan to increase the amount people can earn without paying taxes. The higher the exemption, the better.
Trying to help out the working poor in Saskatchewan is a laudable goal. The government's top down, ham-fisted approach is more likely create more problems than it solves. We need to address the systemic problems and create more jobs, not regulations. And please Mr. Premier, stop taxing the working poor.