Minimum wage versus basic income

No one goes through life remaining the same person. We all change over time. A meal we once loved no longer holds any appeal for us. Our tastes change, as do our likes and dislikes. And the same is true of political beliefs. But such a change doesn’t happen from one day to the next, as it did to Michael Coren after suffering a nervous breakdown a couple of years ago. Once a harsh right-winger, he became an extreme left-winger virtually overnight.

But all the left-wing screed he’s been churning out since then doesn’t feel genuine, but rehearsed, repeated as if by rote. In fact, he’s become an automaton that spews what is deemed proper left-wing ideology. Not one ounce of personal thought seems to inform his articles these days.

Which brings us to his latest piece, on minimum wages and, in particular, on the increase in minimum wages that is scheduled to occur in Ontario over the next 24 months or so.

Coren recites all that is deemed proper and appropriate with respect to the issue of minimum wages, but, again, everything he writes comes across as rehearsed and memorized. Like a parrot, he simply repeats what he’s been told to think, but fails abysmally to apply simple common sense.

Thus, he rails against conservatives and corporations, saying that a minimum wage of $15 an hour is the only way to help the poor and working poor. He conveniently ignores and discards any suggestion that such a rapid increase, from $11 to $15, within a relatively short period of time may likely do more harm than good.

Yes, he’s right when he says that corporations are just shedding crocodile tears and exaggerating the impact this increase will have on their bottom lines. But he’s wrong about the general conclusions he draws from all this.

Whether they have justifiable reasons or not, many employers will cut back on minimum-wage labour as a result of the government-mandated hike. Consequently, there will be more people not earning anything, not even the historical minimum wage of $11.

If Coren had actually used his brain first, instead of reciting prefabricated nonsense, he’d have realized that the amount someone is paid an hour is not the issue, but whether or not they have any income, or safety net, at all.

As such, the only solution to the problem that affects a growing number of people now is the implementation of basic guaranteed income. With living expenses going through the roof just about everywhere in Canada, it makes no difference at all whether you earn $11 or $15 an hour – you still won’t be able to afford a place to live, say, in Toronto. Well, you might, but then you’ll have to do without food or clothing.

Given the cost of living in Canada these days, nothing short of $20,000 a year, tax-free, will ensure your survival. You’ll still be dirt-poor, but at least you’ll survive. But many of those earning $15 an hour won’t clear $20,000 a year – and if they do, they’ll pay taxes on around $8,000 or so to boot.

With the personal exemption being so low, around $12,000 (in Britain, it’s the equivalent of $20,000 and therefore adequate), there’s no way any minimum-wage-earner will end up with $20,000 of disposable income at the end of the year. But that is the bare minimum needed to survive nowadays.

As more and more Canadians, particularly in Ontario, are not in gainful, but precarious, employment, only a basic guaranteed income can address the problem. It doesn’t matter how such a system is structured and implemented; the only thing that matters is that everyone has $20,000 of disposable income each year.

This will alleviate poverty and boost the economy, as more people will have money to spend. And an economy that thrives creates jobs, and tax revenue will rise at the same time. Over time, everyone – workers, employed or self-employed, companies and governments – will benefit from ever-more prosperous conditions.

Increasing minimum wages, however, won’t create any of these positive effects.

Author: Werner Patels

Translator - Thinker - Writer

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