America doesn’t need to imitate Canada on minimum wage — and the Democrats shouldn’t agree

Ford Motor Co.’s announcement on Friday that it plans to move to a $15-an-hour minimum wage by 2022 is a welcome move. The average wage for factory workers is about $9 an hour in…

America doesn’t need to imitate Canada on minimum wage — and the Democrats shouldn’t agree

Ford Motor Co.’s announcement on Friday that it plans to move to a $15-an-hour minimum wage by 2022 is a welcome move. The average wage for factory workers is about $9 an hour in Canada, and much of the typical household income in Canada is below the U.S. level.

A few moments after Ford’s announcement, the official watchdog for the American labor movement weighed in: Terry O’Sullivan, president of the Laborers’ International Union of North America, said in a statement that the Americans “can learn from Canada, they can learn from the UK and Germany, they can learn from the regions they operate in” and make their own “a bold step forward.” Mr. O’Sullivan went on to say that it’s time to move past minimum wage as just another “struggle between companies and working people.” It’s a noble goal, one shared by many of us who are not writers.

Unlike Mr. O’Sullivan, however, I don’t think the Democratic Party is likely to be swayed on this by just listening to its labor unions. There are policies that Mr. O’Sullivan and his allies in the labor movement do support and that would do much to improve the conditions for ordinary Americans. Here are some of them:

1. Raise the federal minimum wage, which is stuck at $7.25 an hour in the U.S. and still below the U.S. median income of $74,050;

2. Repeal the 16th Amendment, which gave Congress the power to make the minimum wage at will;

3. Allow the federal government to order states that have a “worker subsidy” that they take part in a “competitiveness review” to determine the extent to which that subsidy keeps wages from falling so low that those states must raise them above minimum wage.

I’m sure Mr. O’Sullivan would welcome that last item. Even though I’ve long favored keeping the 16th Amendment in place, I don’t mind the congressional authority the 16th Amendment gives the president to administer mandates for spending public money. In recent years, after all, the primary reason both Republicans and Democrats have been so keen to abandon both the health care and pension provisions of the Affordable Care Act (ACA) is that the Supreme Court struck down the ACA on a challenge to the budget power that would make such mandates much more difficult to achieve. There are some worthwhile ideas like the one above that don’t entail a court fight.

(The highest of all wage laws is the Canadian salary act, which sets a maximum wage for each province and prohibits in-sourcing of government work.)

I understand the logic of that example. But what I don’t get is why no one has raised a ruckus about a similar bill in the U.S. That would be the bill by Rep. Rick Nolan, D-Minn., introduced in 2016, which would require all U.S. federal contractors to pay their employees at least $12 an hour. Why doesn’t anyone complain that such a law would hurt the retailers who need to cut labor costs?

It would be very nice, I suppose, if the White House were willing to throw its weight behind such a bill (although its key figure on minimum wage policy might not be so likely to get behind it now). But who would then claim that the law would raise overall compensation standards in the U.S.?

The NDP’s legislators, for one.

I say a lot of people shouldn’t pretend that mandating a particular amount of income on every private-sector employee in the country is somehow going to be accomplished in the way it’s been done in the past. If, for example, we tried to reach higher than $12 an hour in effect, I suspect some rich people would gain more from a higher minimum wage than poor people. And if we assumed the bill worked as described by Rep. Nolan, he wouldn’t be quite right in how he described it, either. I’m hoping President Trump isn’t prepared to let the Democrats in Congress fix it.

From Live Wire: See earlier coverage here.

Sandy Baum is a Bloomberg View columnist and author of “And the Good News Is …: FDR, The New Deal, and The American Way of Life”.

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