Surprise! Fraser Institute comes out against living wage

The Fraser Institute says that paying workers a living wage actually hurts low-paid workers.

 

In a report released Tuesday, the right-wing think tank cites “the best available research” to argue that any gains for some workers come “at the expense of others who lose as a result of fewer employment opportunities,” said Charles Lamman, the study’s author.

 

That’s not what others have found – and likely the reason why the campaign to pay the working poor a living wage is taking off in the United Kingdom. There, companies in London are signing on to the voluntary measure because they’ve figured out that paying employees a living wage boosts productivity and reduces training costs that come with high turn-over rates.

 

“More and more London firms are recognising the benefits of fair remuneration for all of their workforce,” London Mayor Boris Johnson said recently when over 30,000 low-paid workers were about to get a raise as employees of companies that had signed up with the Living Wage Foundation as a Living Wage Employer.

 

“Paying the London Living Wage ensures hard working Londoners are helped to make ends meet, providing a boost not only for their personal quality of life but delivering indisputable economic dividends to employers too. This in turn is good for London’s productivity and growth. It is extremely heartening to see major new companies signed up this year but we need more converts,” said Johnson, a Conservative.

 

There, “two-thirds of U.K. living wage employers report significant positive impacts on recruitment, retention and absenteeism,” notes Broadbent Institute senior policy advisor Andrew Jackson in the Globe and Mail.

 

Jackson also notes that the “best economic evidence seems to show that modest minimum-wage increases have very limited macroeconomic impacts in terms of overall growth and employment. They can, however, have positive impacts for both workers and their employers in low-wage sectors of the economy.”

 

You can be sure the free-market Fraser Institute is against increasing the minimum wage. But then again, the conservative think tank also says a couple in British Columbia with two children ages 10 and 12 can live on $25,377 annually. 

 

Saying this figure was “rigorously estimated,” the Fraser Institute calls that a “basic needs level of income.”

 

Photo: triviaqueen. Used under a Creative Commons BY-SA 2.0 licence.