Is This Really the Answer?

THe provincial budget was released this week. It was billed as being a budget aimed to reduce the number of people living in poverty. Chief among its actions was to announce an increase in the minimum wage from the current $8 to $10.25 by 2010.

The Liberal government will ramp up the minimum wage to $10.25 by 2010 in a provincial budget tomorrow that has been designed to help Ontario’s poorest children and their families.

NOw I have no objection to raising the minimum wage. I think it is a very good thing to do, and I grow weary of the business objection that it will kill jobs by making them too expensive. But I have my doubts that it will do that much in reducing poverty. In fact it could prove to be a strong inflationary force. I can see where people currently making $10.25 will insist that their wages have to go up to maintain the differental between minimum wage and what they make. And of course if wages go up then prices are sure to follow (which may in fact not be a terrible thing either--some things are likely artificially cheap because the labour is grossly underpaid).

But if prices go up then the benefit of an increased minimum wage gets lost. The magic bullet to end/reduce poverty has lost its magic. Maybe the true solution is more radical. Maybe it is time to talk seriously about a Guaranteed Annual Income.

Yes I know GAI is an incredibly socialist suggestion. ANd I have no idea how we might be able to make it work. But if food, shelter, and a certain base level of comfort are human rights (and I truly believe they are) then we need to have a way to provide them. And it will cost us more, either at the tax form or at the cash register. And we have to accept that reality.