Minimum Wage - Another Piece of Straw

I read "Restaurants 'taking from Peter to pay Paul' amid minimum wage hike" by CBC Marketplace and thought "here we go." I knew that the minimum wage hike was not going to have the desired effect, but I am quite disappointed that businesses are taking their hardship out on their employees. Once again, those who can least afford to pay, are going to shoulder the burden for everyone. Maybe this is the time to review wages across the board.

Now, I can hear the business owner's cry out "yes, but it's not our fault, the government saddled us with this burden, and s**t rolls downhill." I'm sorry, that is not acceptable. The actions shown in this Marketplace report, and those of certain Tim Horton's franchisees are unethical. Not only should you not be surprised when the public blames you, should should be ashamed for having tried it in the first place. I have written extensively on Ethical Debt in the past, check it out if you don't understand. The citizens of Ontario need to be made to see this for what it is, an increased tax on business. Like all tax increases, it will work its way through the entire supply chain, and end with the person purchasing the final item.

If business owners feel hard-done-by, why don't you take it out on Kathleen Wynne? When June 2018 rolls around, the populous of Ontario will vote, and the Wynne government will be unaffected (or even rewarded) for this tax because people will not see the long-term impact of her actions. Any rage that is generated, will be directed to businesses who are seen to be greedy by those with little or no knowledge of the true costs of entrepreneurship.

Instead, I suggest that you embrace this increase, and propagate it throughout your organisation... and quickly. Ask yourself, why do some people make more money than others? Does the person who makes more than minimum wage really add more value? If so, how much more? Then adjust her or his wage accordingly. If not, this becomes a training opportunity. This is an opportunity to begin paying people based on the value they provide, rather than the minimum that is required. It may seem trite, but if you care about your people, they will care about your business.

Obviously, these increases will have to be reflected in the prices of goods and services. After all, you are in business to earn a profit, not as a charity. However, I am not proposing that you have carte-blanche to gouge the consumer, but it is appropriate that your expenses are covered. And when the consumers are upset by the hit on their pocket-book, they will direct their anger to the person who initiated the hit, Kathleen Wynne. If you hold off, and try to survive, you will not only be putting your business at greater risk, but you will be letting the Wynne government get away with this attack on your livelihood.

We are all camels here. Each one carrying a burden for the values that our society holds dear. Let us be careful not to transfer our straw to our neighbouring camels, but rather refuse any additional straw that is placed on us just to win votes.

Fair Taxation?

CTV News reported on a town hall meeting in Kelowna, British Columbia, and the push back that Prime Minister Trudeau had to endure. It seems that some in the Liberal caucus, and the Prime Minister himself are a bit surprised that the country isn't jumping on this taxing small business bandwagon. Maybe it's because most people understand that the truly wealthy people of Canada will be unaffected by this change, and the people who are only "comfortable" will be hit, and in some cases hit hard.

You want a fair tax system? Get rid of income tax, and focus on a consumption tax like the GST. Don't single out the one segment of the population that is taking the biggest risk to create jobs. It is my opinion that if we'd raise the GST by somewhere around 5% to 7%, we could abolish income tax all together. Then, the government would be taxing the people with money, and not taxing the poor.

When the GST was introduced, there was a surplus. It seems obvious to me that this surplus was the result of the government basing its GST needs on the income tax ledgers. Once it was introduced, the government started taxing people who were otherwise not paying tax... or at least not all of the tax that the rest of us paid.

Of course, there could be no tax on children's clothing, food, books, cars under $10K or $15K, and a few other "essentials". But when someone goes out and buys a 60 inch TV? Damn straight they should be taxed. Someone buys a new car... absolutely? But someone buys school books or clothes? Not a chance. If you don't have money, you're not going to spend the little you have on the latest technologies and luxury items. But those people with money tend to replace these things at an alarming rate.

Fair taxation? Give me a break. The current tax rules in Canada are so complicated that only people with money, such as Mr. Trudeau, can take full advantage of all the loopholes. The rest of us file our income tax and HOPE we haven't left too much meat on the bone.

The Culture of Poverty

From "The Devil's Miner"

I watched a report by Mathias Meier in the New York Times entitled "Embracing Child Labor". Bolivia, my birthplace, has made it legal for children to begin working at ten years of age.  I must say I am shocked and saddened. I am shocked that this has barely received any press in the developed world, and I am saddened to think of what this will mean for the future of these beautiful people.

I understand the logic of the proponents of child labour. The families are starving, the children are working already, let's make sure that they at least get a fair wage. In fairness, child labour happens to some degree all over the world. Even in North America, on family farms children are expected to perform duties before and after school that are critical to keeping the farm running. The same is true in many family run businesses in Bolivia, but this is not what we are talking about here. Here we are talking about children working at hard labour (mining, brick making, etc), and though it is not supposed to interfere with schooling, one would have to be quite naive to think that it doesn't.

In the above story, Dr. Jorge Domic, the director of Fundación La Paz (a development NGO), says that child labour is part of the Andean culture, and especially Bolivian culture. I beg to differ. Culture is not what a people do, it is who a people are. Culture is the characteristics of a people that distinguishes them from their neighbours. Being hard working and industrious can be seen as cultural. Keeping a segment of one's population poor due to lack of education is not cultural. Despite the promise of a socialist revolution, it is the rich in Bolivia that are profiting from this move, not the poor. Oh sure, the poor will get a few extra pennies, and that will make a difference, but it will be just enough to keep them poor. And by legalizing child labour, families who would have otherwise obeyed the law and endured the hardship of poverty, might be tempted by the newly legalized source of income.

According to the CIA World Factbook, 45% of Bolivians live on less that $2 per day. The Factbook also points out that:

"Bolivia's income inequality is the highest in Latin America and one of the highest in the world. Public education is of poor quality, and educational opportunities are among the most unevenly distributed in Latin America, with girls and indigenous and rural children less likely to be literate or to complete primary school."

So there's your problem. A third of the population is under the age of 15, you have a low quality system of public education, and the access to public education is not universal. Now you are going to compound the problem by making it OK for children to work for pay starting at ten years of age (and their "union" is pushing for that age to be lower still). I like how Alex Rosen put it in his article on this topic in "No Se Mancha":

"If this is Bolivia’s best answer, then perhaps they have asked the wrong question."

What is needed is a break in the cycle of generational poverty. This can only be accomplished by a high quality, universal, public education system. President Morales has done his people a huge disservice.