Make the Minimum Wage a Living Wage!

Brief to the Minimum Wage Board
Presented by Darrell Rankin
Leader, Communist Party of Canada –
May 17, 2001

[The Manitoba government may create a two-tier minimum wage for workers under the age of 18 and for tipped workers. That would be a serious blow to women, youth and immigrant workers – mainly the unorganized workers who have no trade union protection. All workers should be treated with equal dignity and without discrimination!
It is essential that people speak out and protest against a two-tier minimum wage.
The minimum wage is already too low. About $1.9 billion of income has been lost by minimum wage

workers over the last 25 years because the Manitoba government has failed to protect minimum wage workers from the effects of inflation (making certain assumptions, see the brief below). This represents a shift of this amount from workers to capitalists.

The very fact that the government has to legislate a minimum wage to protect the most oppressed sections of the working class is in itself a shameful indictment of the capitalist system. Some of the work force is not even covered - farm workers, so-called “independent” contractors (eg., courier drivers), domestic workers, etc.]

The Provincial Executive Committee of the Communist Party of Canada – Manitoba welcomes this opportunity to contribute to the discussion on the minimum wage in Manitoba. I represent the Communist Party of Canada which has for eighty years fought to advance the rights and conditions of working people and everyone in need, opposed the corporate agenda, and has a goal of a socialist society in Canada.
The Communist Party pioneered many social programs in
Canada. We helped mobilize public opinion so that governments of the day were compelled to act on the struggle for jobs, equality, medicare, unemployment insurance, social programs, trade union rights, peace and disarmament, a democratic solution to the constitutional crisis in Canada and many other issues.
We have always pointed out that reforms have never gone far enough, that conditions are getting worse for millions of people, inequality is greater, and wealth and technology are being used and accumulated in the interests of a small minority of people, the capitalist class.
Brutal, reactionary neo-liberal policies in the last twenty-five years have shifted the balance of forces in favour of the corporations and at the expense of working people and the environment. But these policy changes are themselves partly driven by growing impasses and setbacks in the world capitalist system, a system increasingly unable to meet the needs of the large majority of people.
Manitoba’s economy depends more on an unstable and slowing global economy.
The kinds of jobs that have been created in this period are part time, temporary, low wage, while thousands of better paying, full-time jobs are disappearing. For example, Mr. Buhler is threatening to close his Versatile tractor factory, a closure that would result in the loss of hundreds of better paying jobs.1 While more people have found jobs in Manitoba in recent years, many working families are only one paycheque away from poverty, the food bank or losing their home or their farm.
In recent years, corporations in
Manitoba have intensified their efforts to drive down wages and create a class of workers desperate to sell their labour power for any price. Our newspapers are carrying reports of employers bringing workers illegally from China and the Ukraine, and blackmailing them to work in slave-like conditions.
Young workers, especially, have experienced a dramatic decline in earnings. Between 1977 and 1995, real annual earnings for men aged 18 to 24 working full time, year round, declined 20 per cent. The same figure for women – starting from an already low, unequal figure – was a 9 per cent decline. A society that ignores and punishes its youth has no future, and the capitalist society in
Manitoba is no exception.
All this means that
Manitoba’s minimum wage policy affects or should affect many more people than twenty-five years ago. In 1997, an estimated 16,900 people earned the minimum wage or less, another 30,300 earned not more than 60 cents an hour more than the minimum wage.
When the minimum wage increased in 1999 to $6 an hour, and using the 1997 figures referred to above, almost 15 per cent of workers in
Manitoba were earning the new minimum wage or less. While that compares very unfavourably to the 4.8 per cent of workers across Canada who earn the minimum wage, we are sure that many employers did raise their wages to comply with the law.
But far too many working people work at or close to the minimum wage in
Manitoba. A person working at $6.25 an hour for forty hours over 52 weeks would expect to earn $13,000, far below – or 72 per cent of – the 1999 Low Income Cut-Off for a single person family of $17,886. The minimum wage for a single parent with one child is only 58 per cent of the 1999 Low-Income Cut-Off.
Provincial governments in
Manitoba since 1976 have been willing supporters of the corporate agenda when it comes to the minimum wage. Regrettably, there is little difference in the record between the NDP and Conservative governments. If the 1976 minimum wage had been indexed to the rate of inflation, it would need to be $9.25 today (if the March 2001 rate of inflation holds to the end of the year).
The difference since 1976 between the minimum wage and where it would be without inflation has created an enormous shift in wealth and income from workers to capitalists. For example, inflation robbed a minimum wage worker of 25 cents an hour (rounded to the nearest 5 cents) in 1977, or $520 a year. If there were roughly 17,000 workers earning the minimum wage, this would represent a shift of 9 million dollars from workers to capitalists.
By 1998, the figures are $6,760 per minimum wage worker and a shift of 155 million dollars. Altogether, minimum wage workers have lost about 1.9 billion dollars because of the pro-corporate policy of recent governments to let inflation erode the value of the minimum wage. This is money that is owed to minimum wage workers in
Manitoba, who helped create much of the new wealth in this province.
A rough calculation (assuming a constant 17,000 minimum wage workers per year) shows that both political parties are almost equally responsible for these lost wages. The NDP was in power for ten of the last twenty-five years (40 per cent of the time), and in the years it was in power as of December 31 minimum wage workers lost about $698 million due to eroded minimum wages, or about 37 per cent of the $1.9 billion in lost wages.
The fact it has been necessary to legislate a minimum wage in order to protect those parts of society that have no trade union protection, and groups like youth, women (who comprise about two-thirds of minimum wage earners) and the differently abled is itself a shameful indictment of the capitalist system.
Increasing the minimum wage is only one measure necessary to eliminate poverty and improve equality in
Manitoba. To be effective, such a measure should be combined with other fundamental economic and social policy changes. Ultimately, the abolition of the wages system itself will be needed to achieve a society without the exploitation of labour, discrimination and oppression.
Measures such as a guaranteed annual income (GAI) under the capitalist system are too open to abuse and may contribute to a lowering of wages by forcing people to work for low wage jobs to supplement an inadequate GAI. The capitalist system which must compel the working class to sell its labour power would never exist with an adequate Guaranteed Annual Income.
The Communist Party opposes the differentiation of the minimum wage according to age or occupation. We believe all workers should be treated with equal dignity and without discrimination. We believe the minimum wage should apply to all currently excluded groups, such as farm workers, domestic workers and contractors. We support “fair wage” laws that require union rates of pay for contracted work at all levels of government. The minimum wage must also be indexed at least to the rate of inflation, after it has been substantially increased. We support a minimum wage of $10.50 an hour. Given recent reports of abuses, we demand the enforcement of all employment standards including the minimum wage.
It is clear that policies must now be implemented to counter not only the overall corporate attack on wages, but specifically address the growing problems of capitalist impoverishment, the growth of the working poor and the marginalized sections of the working class.
The scope of the problem goes well beyond
Manitoba’s borders: 820 million workers in 1995 were under- or unemployed, one third of the global labour force. Record numbers of youth are entering the labour force – 700 million were aged 15 to 24 in 1999.2

The lost productive forces now unemployed by this system is enormous, as is the burden of an enormously bloated class of big capitalists and their servants, unsustainable depletion of resources and dangerous military pursuits.
The future that capitalism now holds for working people, including farmers and small business, is a bleak one. The large majority of people stand only to gain with realistic policies to create jobs and reduce poverty. A significant boost to the minimum wage to make it a real living wage, combined with a shorter work week with no loss in pay, taxes based on ability to pay and improving and creating new social programs – these realistic policies alone hold promise for the future.
The capitalist system may not have the ability to reform itself any more, as it has attempted to do in the past. But the failures of capitalism themselves are creating the conditions for its replacement. The low-wage policy of recent
Manitoba governments is just one more obstacle that will have to be overcome on the road to a better society.

Manitoba raised the minimum wage to $6.50 per hour; unlike other provinces, it did not introduce a two-tier system.]



1 – After a long strike and lockout, Don Buhler had to pay substantial compensation for unfair bargaining, but the Versatile workers lost their jobs, and Buhler now has a union-free plant.

2 – OECD figures. Vancouver Sun, June 6, 1995; “Record numbers of youth will seek work: UN,” Globe and Mail, September 2, 1998.