There has been ample media coverage of the well-deserved award of the Nobel Prize in Economics to Canadian David Card, in part for his work on the impacts of the minimum wage. As Andrew Coyne noted in the Globe and Mail, however, Card's work requires interpretation.

Card studied the impacts on employment of a small minimum wage increase in New Jersey in 1992 compared to adjacent Pennsylvania which did not raise its comparable low minimum wage. The key finding was that there was no negative impact on minimum wage jobs in New Jersey, contrary to the mainstream economic orthodoxy of the day.

Many subsequent studies have confirmed that modest increases in the minimum wage from low levels indeed have little or no impact on jobs. The most plausible explanation is that, left to their own devices, employers set the wage at too low a level. A wage increase can pay for itself by reducing very high turnover in low-paid jobs and associated recruitment and training costs.

Further, employers can respond to a minimum wage increase by accepting a somewhat lower profit margin, or by raising prices, rather than by cutting jobs.

Some thirty years after Card's study, economists take a much more nuanced view of minimum wages.

It has come to be recognized that higher minimum wages can be a significant tool to raise productivity, defined as the value of output per hour worked. Higher productivity can justify higher wages, increasing the quality of jobs.

Imagine you are in a minimum wage job paying $10 per hour and that you work 30 hours per week, earning a total of $300. If the minimum wage is hiked by $1 per hour, your earnings would rise to $330.

Suppose the employer responds by investing in new machinery and training to raise output per hour, and cuts hours from 30 to 28. In that case, the worker still gets a pay increase, from $300 to $308, and gains two hours of time to work elsewhere.

At the economy-wide level, higher productivity can mean fewer low-wage jobs without causing high unemployment.

In the Scandinavian countries, about 10% of all workers are in low-paid jobs, defined as earning less than two-thirds of the national median wage, compared to 20% in Canada. Unions and labour market policies such as high minimum wages can set a high wage floor without raising unemployment. Workers in low-wage sectors like fast food and hotels earn much more per hour than in Canada.

Our goal should be decent wages for all workers. The way to get there is to push for higher productivity in low-wage sectors by raising wages while maintaining full employment. That is precisely the formula pioneered by Sweden which remains relevant today.

Due to the strong lobbying efforts of labour and social activists, Canada's minimum wage floor is rising significantly from the current level of between $11 and $12 per hour depending upon the province. A new norm of $15 per hour will be in place, in Alberta by October, 2018, in Ontario by January, 2019, and very likely in British Columbia under the terms of the NDP-Green Party agreement.

On June 22, the BC Legislature reconvened and Premier Christy Clark tabled a curious Throne Speech which bore little resemblance to the platform her BC Liberal party ran on just weeks before.

The Alberta government has done it.

On October 1^st, the minimum wage increased by one dollar to $12.20 per hour, making it the highest provincial, but not territorial, minimum wage in Canada. 

Few Canadian economic debates are as long-standing and as predictable as that over the pros and cons of  raising the minimum wage. Progressives call for a higher wage floor to combat inequality, low pay and poverty. But employers and the political right generally argue that a decent minimum wage comes at the cost of jobs, and harms those it is intended to protect. 

Over the past 20 years, income inequality has been growing faster in Canada than in other similar countries. During this period about one third of all income growth has gone to the top 1%, leaving precious little to be shared among the remaining 99%. We know the inequality problem all too well, but what is the answer to addressing it?

There seem to be three main pillars that provide effective solutions: progressive taxation, a robust safety net, and ensuring fairness in the workplace. This third pillar includes raising the minimum wage in a transparent and predictable manner, improving associated employment standards legislation, and generally making sure labour laws have kept pace with what’s happening in workplaces across the country.

Wages in Canada and the other advanced economies are about as flat as left-over champagne in the glass on New Year's Day. This poses a major threat to a sustained economic recovery.

During the four years from 2009 through 2013, average hourly wages adjusted for inflation rose by a grand total of just 2.3%, or by about one half of 1% per year. Real wages rose by a total of only 0.9% in Ontario and 1.1% in Quebec over those four years, though by a healthier but still unimpressive 4.8% in Alberta.

The Leader of the Opposition, Tom Mulcair, is to be congratulated for his proposal to re-introduce a federal minimum wage.

Abolished in 1996, the federal minimum wage applied to the approximately 8% of all employees who work in federally regulated industries. It also used to set a national benchmark for provincial minimum wages. Mr. Mulcair's proposal is in line with the 2006 Federal Labour Standards Review that was appointed by the Minister of Labour and led by Harry Arthurs, a distinguished labour law expert who was Dean of Osgoode Hall Law School and, later, President of York University. Professor Arthurs, who recommended that a federal minimum wage be re-introduced, argued that “the government should accept the principle that no Canadian worker should work full-time for a full year and still live in poverty... this is an issue of fundamental decency that no modern prosperous country like Canada can ignore.” 

Geoff Meggs and Rod Mickleburgh. The Art of the Impossible: Dave Barrett and the NDP in Power, 1972-1975. Harbour Publishing. 2012.

This impressive and readable book by two well-known and respected British Columbia authors sheds light on a now largely forgotten episode in Canadian politics and is a welcome reminder of the very real gains that can be made by a determined and genuinely progressive government.

Geoff Meggs is a journalist and current Vancouver City Councillor, and Rod Mickleburgh writes from Vancouver for the Globe and Mail.

As Canada's right wing gathers this weekend in Ottawa, the conservative movement finds itself looking in a strange -- and somewhat dangerous -- place for inspiration.

Conservatives attending the 2013 Manning Centre networking conference will hear from the usual roster of cheerleaders, political practitioners and ideological elders. But this year's keynote is something different. A surprising guest whose ideas can only be described as completely outside the Canadian mainstream: former U.S. Congressman Ron Paul.

Mr. Paul is well known in the United States for his radical notions. Often described as the "intellectual godfather of the Tea Party," Mr. Paul takes libertarian philosophy to new heights. His positions and policies are offside most U.S. Republicans, let alone Canada's more temperate Red Tory traditions.

One need not dig too deeply to figure out why.

In a 2007 CNBC interview, Mr. Paul suggested that the US Federal Reserve should be abolished in favour of a system of competing currencies: "We can't get rid of the 'Fed' in a day or a week but we could legalize competing currencies...if people don't like competing currencies... they can opt-out and start dealing in gold and silver."

In his 2011 book, Liberty Defined, he opined that, "We need to give up our dependence on the state... it is far better to live in an imperfect world than it is to live in a despotic world ruled by people who lord it over us through force and intimidation." I am left scratching my head at this bizarre statement: which despotic agents of the state, exactly, is Mr. Paul referring to? Doctors? Nurses? Social workers? All of the above?

Mr. Paul has been particularly outspoken on a number of other important issues. As a self-described "unshakeable foe of abortion," he has gone so far as to introduce legislation "which would negate the effect of Roe v. Wade." Mr. Paul opposes gun control because he believes it "clears a path for violence and makes aggression more likely." Go figure. Mr. Paul even wants to abolish the minimum wage: during a 2011 Republican primary debate, he argued that "minimum wage is a mandate. We're against mandates so why should we have it?"

Climate change -- which all Canadian political parties have now acknowledge to be real -- is still a fantasy to Mr. Paul. He suggests that "I don't think there's a conclusion yet... if you study the history, we've had a lot of climate changes."

Mr. Paul has spoken candidly about his views on sexual harassment in the workplace. During a Fox News interview, he stated that "...if people are insulted by, you know, rude behaviour, I don't think we need to make a federal case out of it... people should deal with it at home."

And on key votes he has frequently been virtually alone in speaking against what is essentially a right-left societal consensus. On the 40th anniversary of the Civil Rights Act's passage, Mr. Paul was the only Congressman to vote against a resolution hailing the Act, and even gave a speech to Congress claiming that it "violated the Constitution and reduced individual liberty."

I could go on. Mr. Paul's record of opposition to most ideals Canadians hold dear is very lengthy.

The Manning Centre is, of course, free to invite anybody they wish to their party. Even the Tea Party. But my grandmother used to tell me that "You're known by the company you keep", which seems to me a fair comment in life as in politics. Of all the conservatives the Manning Centre could have invited to be the star attraction at their annual shindig, why Ron Paul? Is this supposed to be a foreshadowing of the future direction of Canada's conservative movement? Which of his, frankly, bizarre ideas does the Manning Centre agree with? How does the Centre see Mr. Paul's contribution as being a positive addition to our Canadian political conversation?

Most importantly: Which pieces of Ron Paul's extreme agenda do Canadian conservatives harbor the ambition of importing?

Canada's conservative movement has been working overtime over the last few years to convince Canadians that they are mainstream and on a roll. It is no surprise that my organization and I disagree with both the philosophy and (alleged) facts behind these conservative arguments. By welcoming Ron Paul to Canada, however, it is difficult to see how the Manning Centre furthers even its own stated objectives.

This article originally appeared on Huffington Post Canada.

Photo credit: Gage Skidmore. Used under a Creative Commons BY-SA 2.0 licence.