CELEBRATING 133 YEARS AS CANADA’S PREMIER HORTICULTURAL PUBLICATION
OCTOBER 2013
VOLUME 63 NUMBER 10
MINIMUM WAGE DEBATE
Raised rate? Less labour KAREN DAVIDSON It’s a cold morning, but warm camaraderie rises to meet the sun on Thanksgiving weekend. This is what ginseng digging looks like in Norfolk County. On the face of it, these workers have a dreary job, picking up gnarled roots and tossing them into bushel baskets. The fact is that most are return workers from the Vietnamese-Canadian community in nearby Hamilton. “They are extended family to us,” says Dave Smith, Harley, Ontario ginseng grower. “We work side by side.” With five St. Vincent/ Caribbean workers hired from the Seasonal Agricultural Workers Program (SAWP) to work April through November, Smith manages several ginseng gardens, selling his crop to China. Prices are firm to strong this year. What may erode that success are the ultimate recommendations of Ontario’s Minimum Wage Advisory Panel struck July 17. Note that the panel’s mandate is narrow. It’s not to recommend a number – a minimum wage per se – but to suggest a process for determining changes to the minimum wage in the future. The “Consultation Paper on Ontario’s Minimum Wage” (www.labour.gov.on.ca) asks respondents to answer specific questions about the impact of
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How many people does it take to harvest ginseng? Turns out, quite a lot on this brisk October morning at the farm of Dave Smith, Harley, Ontario. These Caribbean and Vietnamese workers have just resumed work after a 9 am coffee break. For years, Smith has hired a local crew of Vietnamese-Canadian citizens for the harvest. But with the aging of those repeat workers, he can foresee a dwindling work force in the future. For this season, he’s invested in a semi-automatic harvester to reduce the need for labour. Photos by Glenn Lowson. tying the wage to economic indicators, i.e. the consumer price index (CPI), average weekly earnings, low-income cut-off or living wage. The deadline for written responses is October 18. Chair Anil Verma is to report back to the labour minister by early 2014. That the discussion is happening at all is “terrifying” says Ken Forth, chair of the OFVGA labour committee, who says horticulture has no representative on the six-person advisory panel. The rate has already risen to $10.25 per hour, a 28 per cent increase from 2008 to 2010, well above inflation levels for that period. Any further boost affects growers who hire 16,000 temporary foreign workers every year. As ginseng so aptly demonstrates, it’s one of many horticultural commodities sold on global markets. However, international competitors don’t have to meet Ontario/Canadian standards of food, worker or environmental safety.
“In real money, the SAWP workers are making $13 to $14 per hour now because growers also pay housing and transport,” says Forth. “If we raise the rate anymore, we’re in big trouble competing against Mexico which pays workers five to eight dollars per day. My accountant says that if there is a significant raise in the minimum wage rate, I shouldn’t plant next year.” No jurisdiction functions in isolation of others argues Ken Linington, Labour Issues Coordinating Committee (LICC), in an industry response paper. Minimum wage levels need to be competitive with other provinces, the United States, Mexico and other countries. Tying the wage to economic indicators such as the rate of inflation or average weekly earnings has pros and cons. Following inflation is better than political whim and is more predictable. But, the make-up of the CPI and the lag period could extend a recessionary period affecting ability to pay a higher
wage. Minimum wage is a societal program funded by a small percentage of employers. Rather than minimum wage, Linington proposes a multi-wage level similar to that used with students and liquor servers based on age, experience and industry sector. A tiered minimum wage for agriculture could be implemented based on the average of minimum wages of key competing jurisdictions (i.e. Quebec, Saskatchewan, British Columbia, California, New York, Michigan and Ohio). Under this model, the employer would pay a competitive base level topped up with a wage that society feels is appropriate from general tax revenues. Ostensibly, the impetus for raising the minimum wage rate is to alleviate poverty. However, in a recent opinion editorial, Philip Cross, the former chief economic analyst for Statistics Canada, writes that the poverty rate in 2011 reached an all-time low, a fact with no precedent during a
recession. (Google Financial Post, The Social Safety Net Worked, September 17, 2013). If the poverty rate is indeed decreasing, questions remain. If the minimum wage rate were to be tied to CPI, would this be attempting to fix a problem that doesn’t exist? Would a rate increase, in and of itself, be inflationary? Economists can bring the academic weight of their studies to the table, but farmers can attest to the real-life burden of wage increases. As small business employers, they will say that any increase to part-time workers puts pressure on permanent staff salaries. And if pricing of inputs are rising at the same time, there’s a huge pinch that will leave an ugly bruise. Ginseng grower Dave Smith isn’t waiting for the panel results. His loyal workers are aging, so he’s semi-automated his harvesting equipment this season. He can see an end to hiring so many staff. CONTINUED ON PAGE 3