How to End “Working Poverty” in Canada

[The following is a re-posting from my weblog “On Second Thought” posted weekly on ContextwithLornaDueck.com]

There should be no such category as “working poor” in Canada. As many economists have shown, if we paid people who work full-time for a full year a minimum wage of $15 an hour, we would have no working poor in this country.

I’m not an economist. And let me anticipate the usual reaction when a professor tells business owners and politicians what to do: No, I have not had to make a payroll, nor get elected.

So I’ll stick to what I do know.

As a historian, I recall the gross mistreatment of workers during the industrial revolution in Britain. Institutionalized poverty, seen in filthy, tiny row house upon row house—really, slum upon slum—was justified by owners as simply the best they could do…until reformist governments made them treat their workers better.

Startlingly, those mills didn’t all go out of business. The owners’ bluff was called, and England’s economy flourished.

I likewise think of an entire region’s economy—that of the antebellum South in the USA—that was dependent upon chattel slavery. This even-more-awful form of institutionalized poverty was defended as, yes, simply the cost of doing business. Without slavery, it was proclaimed from lecterns and pulpits for decades, a whole honorable way of life would collapse.

We all have settled opinions now about just how honorable that way of life actually was. And the last time I visited Atlanta and walked among its giant office towers, I noticed fairly strong evidence that their economy had not, so to speak, gone with the wind.

Canadian executives and board members typically offer the same rationale for failing to pay people a living wage: We simply can’t pay any more than we do.

As I say, I’m no economist. But let’s submit this claim to a pretty basic test.

If everyone involved in the company—at every rank—is making less than $15 an hour, then yes, you can’t pay anyone any better. But until the executives have cut their salaries back, and until the directors have done likewise, until everyone for whom they are responsible is making at least a living wage, then their argument rings hollow.

Why should they be enjoying a far more comfortable standard of living when people in their care are in poverty?

Note that this not an argument for everyone being paid the same. It is an argument against paying people badly, and shrugging about it.

The usual retort will be that someone somewhere else will pay less, and thus gain a competitive advantage. Even if we raise the minimum wage across the country to $15 an hour, foreign companies will undercut us.

Maybe so, although even my elementary reading in economics tells me that the cost of labour is far more complex than mere wages. In fact, recent economic history tells me that many companies hurried to “offshore” their labour, only to find tremendous problems in quality control, supply chain dependability, component compatibility, worker integrity, and more. So they’re moving back.

Nonetheless, and this is the moral point an ethicist simply has to raise: The right response to someone else’s treating people badly surely cannot be to exploit your own workers.

Furthermore, if certain business leaders cannot run profitable companies without injustice, then maybe the problem isn’t with the employees, or the market, or the vendors, or anyone else. Just because this set of executives or directors can’t do it doesn’t mean it can’t be done! Perhaps it’s time to move out of the way and let someone more capable do what needs doing for the sake of everyone involved.

Or just shut it down. The cost of doing business simply cannot be injustice.

It’s time to end specious arguments endlessly repeated by the well off at the expense of the poor. There is no mystery to ending the misery of the “working poor” in this country. There is just refusal.