Wage earning gap could be reduced by adopting a maximum wage

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Editor:

Though few of us in Saskatchewan would deny the need for a strong minimum wage, to help protect our most vulnerable working people, it might be time for our province to consider implementing a maximum wage.

Because wages for the middle class in Canada have remained flat, after being adjusted for inflation, since the 1970s, and because successive governments have made repeated efforts to weaken working people’s organizations and to erode economic democracy, it comes as little surprise that the income gap has widened significantly over the past several decades.

A 2009 study showed that, in Saskatchewan, the lowest-earning 50 percent of families with children took home just 19.6 percent of provincial earnings. Meanwhile, the highest 10 percent took a staggering 28 percent of earnings. In contrast, in 1976 the lowest-earning 50 percent of families would have accounted for nearly 27 percent of total earnings.

Despite the low-wage agenda that permeates our business world and our politics today, there are those that are defying the trend. For 35 years, Ontario-based Lee Valley Tools has linked the highest wages in the company to the lowest as a ratio. The highest paid employee can never make more than 10 times the rate of the company’s lowest-paid employee. Again in contrast, the effective wage ratio in Canada’s biggest companies was, on average, 122-to-one last year. Only a decade ago the ratio was 84-to-one.

Lee Valley Tools is not alone. A new international certification agency called the Wagemark Foundation recognizes employers that maintain a ratio between highest and lowest-paid employees of eight-to-one or lower, and new companies are being certified all the time.

If our governments are serious about addressing what has become one of the greatest social and economic problems in our society, then they must act on bridging the income gap. Enforcing a ratio for earnings is just one example of a policy that would benefit the economy, benefit our communities, and, most importantly, benefit Saskatchewan people.

Though the minimum wage sometimes makes its way into public discussion, it’s time for us to start talking about a maximum wage.

Larry Hubich - President, Saskatchewan Federation of Labour

Organizations: Saskatchewan Federation of Labour

Geographic location: Saskatchewan, Canada

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