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Economic theory doesn’t hold water

The pleasant woman or man who pours your morning double-double got a raise last week, although not quite enough to add up to a cup for themselves even after an eight-hour shift.

Nova Scotia’s minimum wage crept up 15 cents-an-hour, to $11 because Premier Stephen McNeil believes anything more might fuel inflation. He also mused incongruously about a unified minimum wage across Atlantic Canada but didn’t say whether the other provinces would lower their minimums, or Nova Scotia would catch up by increasing its by 55, 25, or 15-cents to match PEI, New Brunswick or Newfoundland respectively.

The premier’s pet economic theory seems to contend that paying hard working people something closer to a living wage will drive up the cost stuff they can’t afford to buy anyway. That’s like saying you should bail out your boat so the ocean doesn’t run out of water.  

In fairness, his inflationary hysterics was a fallback position. Initially, his defense of Canada’s second lowest minimum wage traded on a tale from the crypt inhabited by a bloodsucking Ontario coffee-seller who threatened financial retribution against his workers after that province announced it was heading to a $15-an-hour minimum wage.

The premier was trying to argue that a higher minimum wage would harm minimum wage earners because, as per the Ontario example, business owners would somehow punish them. That position must have been irresistible for its political symmetry. It alienates the working poor while insulting businesspeople.

It’s uncertain where the Nova Scotia government looks for its economic advice, although last week the premier seemed to be relying on some research from the Royal Bank. Generally, banks generate research to help their investors, and very few minimum wage earners are in blue-chip stocks, opting to keep their money in shorter-term investments, like dinner.

A comparison between the poorest workers in the province and the relative fat cats who impose the poverty policy on them is worth considering, if for no other reason than to confirm the Peter Principle.

Nova Scotia’s senior civil servants, deputy ministers and such, unlike the province’s lowest paid workers are not at the bottom of the national heap, but somewhere in the middle.  Senior deputies are paid north of $200,000 and the premier has more six-figure earners hanging around his offices than Tim has donut flavours.

The premier himself is the fourth or fifth highest paid first minister in Canada, depending on how you crunch the extras. Suffice to say, unlike minimum wage workers in his province, he is a long way from the bottom.

The powerful taking care of themselves, while keeping the masses huddled is a time-honoured tradition, particularly in uncivilizations courting revolution.  In present-day Nova Scotian the peculiarity extends across public sectors.

Readers have been critical when it was noted in this space that Nova Scotians family doctors are the lowest paid in the nation. The correspondents would point out that wages in Nova Scotia are lower across the board. The case has some validity unless the board is the authority.

Unlike Nova Scotia doctors, pay scales for the senior administrators at the Nova Scotia Health Authority were established at a level deemed nationally competitive. The bottom line is a good one for those bureaucrats at the authority whose pay falls in the mid-range for similar jobs Canada-wide.

Reaganomics – the belief that when those that have get more some will tickle down to those who don’t have any – was once described as voodoo economics by the elder George Bush, who eventually tempered his rhetoric enough to become Ronald Reagan’s vice president. The economic theory is still bogus, but Bush got to succeed Reagan as president.

Nova Scotia’s cheap labour policy, whether for minimum wage earners or family doctors, doesn’t have a catchy epithet like Reaganomics, nor has anyone yet labelled it for religious cult.

It’s enough just to know that austerity and parsimony around here doesn’t start at the home of those who impose it on others. But then, it never does.

Jim Vibert, a journalist and writer for longer than he cares to admit, consulted or worked for five Nova Scotia governments. He now keeps a close and critical eye on provincial and regional powers.

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