Thursday, February 12, 2009

Wrong solution

I was reading a link posted by yofed about the cost of food in Halifax and while I find it strange that it cost more there then it should there is something in the article that makes me thinks Halifax won’t see a lowering of it’s food price anytime soon. You see Patty Williams one of Halifax nutrition expert is proposition a very bad solution for the healthy food problem faced by “poor” families. Her solution: raise the minimum wage by 4 to 5 dollars an hour.

Now maybe you think, what up astrogeek that a good solution! Give more money to those that receive the less and they should be able to afford all the stuff they can’t right now. Well let me ask you something, do grocery stores hire lots of employee at the minimum wage rate? Then, consider that raising every minimum wage employee wave by 4 to 5 dollars an hours should cost that store about 160$ a week for each employee. That add up to 8320$ per employee per year. Doesn’t sound like much for just the grocery store but then remember their is a chain of people working for minimum wage between the food production and the grocery store each one costing 8320$ a year more. Now, no business men wants to reduce its profit (or worse go into deficits) so the easiest and most logical choice would be for them to increase the prices of everything. The end result being that the minimum wage worker have at best as much spending power as it had before and at worse less, because other employee that where paid above the minimum wage would like an increase in their wage to keep up with the increased cost of living which will by itself also increase cost of living.

This increase of minimum wage idea is the start of a vicious cycle, every time you do that, you actually make the situation worse by increasing the prices across the board. Now a wiser solution (at least according to me) would be to lower one of the many taxes that are imposed on the food from its production to its consummation. One tax that would really benefits everyone (and the minimum wage worker in particular) is a lowering of the fuel tax. The amount of fuel required to take food from our field to our homes is staggering and it account for a significant part of the price of everything, lower that cost and you should lower prices across the board making healthy food more accessible. And that would also strangely give more spending power to the minimum wage workers. Wouldn’t that be a better solution?

No comments: