CHAMBER NEWSLETTER SUMMER 2016

As we continue in our efforts to be open, partner and work with fellow proactive groups that, together, act to enhance Chatham-Kent’s economy, we have recently met with our M.P.’s Dave VanKesteren and Bev Shipley. In doing so, we joined with our local Chambers of Commerce and brought some common ground issues to the table. Our meeting with Dave and Bev was the first sit down with both elected officials representing our municipality. The concept of joint Chambers and Chatham-Kent’s elected Members of Parliament seems to make great sense as we make the most of time and energies together. While the conversation wasn’t all smooth sailing, we appreciate the difference of opinion as we work to understand and deliver on the needs of our business and community. We’re now working with our MPP’s to secure a June meeting date that works best for all.

Speaking of provincial government, I would be remiss if I didn’t mention the issue of the day, one that is quite troubling. Suggestion is that natural gas usage could be affected within the proposed ‘Climate Change Action Plan’. Be informed, should anything drastic happen we, Chatham-Kent, should be gravely concerned. Although details are yet to be confirmed, we understand the dire effect this could have on one of our largest employers, Union Gas. What does this mean for the Company? What does this mean for their employees? What does this mean for you, their customer? And, what does this mean for the local organizations and initiatives Union Gas and its employees support? Let’s realize that we are the host community to this large and vested company but as a province, they are also integrated in every community they field. If they are able to support less community and you are unable to afford the changes, just what does happen to costs of business and local economies?

Effects of Increasing Minimum Wage

“Such a policy appeals to many Canadians because they think it will help the poor. Yet a published studies show, the minimum wage is a very blunt instrument that arguably hurts the working poor more than it helps. It’s time to shift the debate to more effective policies.” The Fraser Institute

Notably, hiking the minimum wage has potential to do considerable harm. The direct effects may decrease employment opportunities among low-skilled workers—the very group these policies are intended to help – if not reducing new employment outright. Hiking the minimum wage could lead to a reduction in hours or degrade other benefits (such as on-the-job training) for those employee’s that retain their jobs. In Canada, there is enough empirical data examining the effects of minimum wage as a result of Provincial management and the wide range from top to bottom across all provinces.

By making it harder for low-skilled workers to obtain entry-level positions, a higher minimum wage perversely hinders the development of human capital and harms the long-term career prospects of the very people it’s desperately trying to help. In fact, Canadian research has found that hiking minimum wage has “no statistically significant” impact on poverty and in some cases causes further disparity by increasing the gap of those that have and those that have not.

Undeniably, in any event, there is more at stake than an over simplification of potential lost jobs for low-skilled workers. As employers are forced to pay higher wages for routine manual or routine cognitive work, irrevocably it gives incentive to cut back on other forms of compensation - such as job training, skills development and health benefits. Employers will increasingly make that investment in automation and technology. As consumers we are likely to see the “pass along” effect of the increased cost of minimum wage while creating an unintended consequence; a disproportionate impact on the poor that furthers the gap and lessening the purchasing power of any wage increase they may have received.

“It’s good for local economies, because those folks aren’t ‘banking’ the added income. They are out spending it!” said Andrea Horwath, Provincial NDP Leader, at the recent Ontario Chamber of Commerce AGM.

In my view, that is a short term band-aid. The fact that most minimum wage earners are already struggling to save substantially; first for themselves, secondly for any unexpected emergency financial situations or their children’s future is concerning to me. It doesn’t address the underlying long term concerns of expecting a reasonable retirement income beyond what CPP, OAS and GIS may provide. The quality or standard of living is not measurably improved with incremental changes to minimum wage, nor does it sufficiently address the level of financial support required for future unexpected financial needs. Many of those earning minimum wage will remain the group largely dependent on a continuing need for social support mechanisms both today and in future.

“Give a man a fish; he will eat for a day. Teach a man to fish; he will eat for a lifetime.”

As I’ve discussed in previous articles, all of this further amplifies the need to rethink and take action immediately on initiatives that improve education opportunities, skills training and development. As more traditional labour jobs become reliant on technology we run the irreversible risk of leaving behind a core of Chatham-Kent’s population that a higher minimum wage is designed to help. However, with a well-designed and executed incentive program to help small and medium sized businesses invest in training and development, current and future employees will be skilled enough to rise above the work of automation and robotics, including routine manual or routine cognitive work.

On April 25th Blackburn News reported the Greater Essex County School Board’s plan for a school consolidation in Kingsville. Education Minister, Liz Sandals, announced $44 Million to help fund a Brand New “State-of-the-Art” Kindergarten – Grade 12 School that will also double as child care facility. The consolidation will incorporate Harrow District H.S., Jack Minor Public School, Kingsville Public and Kingsville District H.S. “You will have a school where there is a critical mass of students, which will allow the Board to provide a broader range of programs for students” explains the Minister. The money comes from a pool of $750 Million the Province has set aside as the Provincial Government is looking to create more efficiencies and Community Centric Hubs.

You have to wonder what a $44,000,000 investment into Chatham Kent would provide?

Your Chair,
Christopher June