Living Wage Versus Upgrade Your Job Skills

Minimum Wage laws have been around for a long time and while they moderately increase costs, which employers pass on to consumers, they do provide some support for the poor and young people who are entering the work force for the first time.  Now the latest craze is Living Wage, an income redistribution scheme defined as the minimum earnings necessary to meet the basic needs of low-income families.  The main problem with this concept is that it is significantly higher than Minimum Wage thereby forcing private-sector employers to either cut-back the number of employees or get a bigger bang for their bucks by hiring more highly skilled workers.  Both of these responses have a negative impact on the poor and entry-level workers.

When it comes to the public sector, the story is a little different because legislation can force companies awarded government contracts to adopt Living Wage.  Take the example of New Westminster, a Canadian city near Vancouver, British Columbia.  The provincial Minimum Wage is $10.25 an hour.  But the city council requires all companies awarded contracts to pay a Living Wage of $19.62 an hour.  And of course these extra costs are simply added on to the tax burden of New Westminster residents.

The main argument trumpeted by promoters of Living Wage is that the resulting increase in income will benefit the overall economy - the more money consumers have to spend, the more sales and profit for small and big businesses.  Wrong!  Only market forces (competition, innovation, efficiency, highly skilled workers, good management)  can create profit.  Living Wage is simply wealth redistribution.

The poor and entry-level workers would be much better off with skill development programs, apprenticeships, family support or reasonably subsidized daycare, job counselling, financial planning and a host of other tools.

In other words, give people more credit for having the desire and drive to make it on their own.  If they had real opportunities for development and advancement in the workplace, they would choose that route over a free lunch every time.

Ignore the promoters of Living Wage and all the other Social Engineering propaganda - they simply depend on the dependency of others for their own jobs.