There is a growing body of research informing us that a business strategy focused on stably employed, better paid workers is good for business and the economy.
By Kaylie Teissen
Ontario’s Fair Workplaces, Better Jobs Act (Bill 148) is largely being touted as a story of workers against employers. The tale playing out in the media and around many dinner tables across the province suggests that if workers win, businesses lose.
But a growing group of employers is advocating the opposite. This is a story the Ontario public needs to hear more about.
Indeed the provisions in Bill 148 will benefit workers. If the bill passes, part-time and temporary workers will receive equal pay for equal work. Many workers will see personal emergency leave provisions expanded. Longer tenured workers will have more vacation time, and many workers will see more predicable scheduling provisions.
In addition, full-time, minimum wage workers will earn an income that sits slightly above the poverty line. By the way, that was also the case in the mid-1970s.
Minimum wage will sit at roughly 53 per cent of the average hourly wage. It’s not quite as high as the 60 per cent of the average wage that myself and colleagues have advocated, but it is in the range of what is considered an appropriate goal among many economists and policy-makers.
A boost to $15 an hour also gets low-wage workers closer to realizing the benefits of the productivity gains that have been made over the last 40 years. Between 1965 and 1975, the minimum wage roughly tracked productivity gains as both increased over time. However, since 1976, the two have become decoupled and minimum wage earners have not been seeing gains in their pay cheque anywhere near what the economy has seen in terms of productivity growth.
In addition to closing the gap between minimum wage and productivity gains, increasing the minimum wage is likely to lead to productivity gains both at the firm level and in the aggregate measurements.
And this is where the business case is being made by employers.
A recent report from the United Way of Toronto and York Region in partnership with KPMG outlines some important secure work strategies being employed by local businesses to improve employment quality while simultaneously increase productivity and positively affect their bottom line.
The Ontario Living Wage Network is a network of more than 150 Ontario employers who have made a commitment to lifting the pay floor in their workplaces far beyond the provincial minimum (current and proposed). On average, these employers pay their lowest paid workers $16.30 per hour — well above the proposed $15 an hour minimum wage.
The Better Way Alliance is a group of private sector employers that is speaking out in favour of decent work as a strategy to grow the economy and improve worker well-being. The employment model these businesses rely on goes well beyond pay to include strategies for predictable scheduling, permanent work, training, professional development and employee voice.
These decent work strategies include paying a living wage, providing predictability in hours and scheduling, offering professional development opportunities, providing health and disability benefits, and ensuring paid sick leave to name a few.
The thing is, employers still pay when their business strategy is focused on low-wage and insecure work — they just pay in areas that are not as obvious on the balance sheet as wages, such as higher turnover, increased recruitment costs, employee disengagement, lower productivity, consumer frustration and customer dissatisfaction.
There is a growing body of research informing us that a business strategy focused on stably employed, better paid workers is good for business and the economy. This is a message that flies directly in the face of much of what I learned as a business management student and much of the fear employers are voicing as the legislation moves toward the implementation stage.
The story being touted around the Fair Workplaces, Better Jobs Act is one of workers against employers. Reading the headlines might lead you to believe there can only be one winner, when in fact the implementation of these decent work strategies will benefit everyone.
Kaylie Tiessen is an economist. She works in the research department at Unifor.