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The incidence of a daycare wage increase, however created, is bound to fall on families that cannot replace the care with their own effort

But the demand for hired care is, in the short term, very inelastic. The incidence of a wage increase, however created, is bound to fall on families that cannot replace the care with their own effort. The families depending in some way on minimum-wage earners will get a corresponding benefit — unless the minimum-wage job goes out of existence (oops), or employers find some creative way of imposing the incidence on them while complying with the wage hike, as we see many doing right now.

The organized labour news website RankAndFile.ca pointed to an interesting example of that phenomenon on Wednesday. Some owners of pubs and restaurants, antagonized by the higher minimum wage, have been arbitrarily increasing the amounts that servers have to chip in to “tip pools” at the end of a shift.

Ontario’s labour regulations have been strengthened to prevent owners from withholding tips from servers for punitive reasons. But there is no regulation or restriction of the amount taken for tip pool sharing, nor oversight of the division procedure. (There is, to indulge in polemic for a moment, only the “regulation” that the market imposes — the option of leaving Bad Boss A, going across the street to work for Less Bad Boss B, and sharing information about which is which.)

This is another case where a Toronto Red Star social justice reporter and a National Post Wormtongue for free-market predators can probably be heard going “Aha!” at the same moment, for different reasons. I read the tip pool story and reflect on the clumsiness of minimum wages as a welfare instrument, the inherent sluggishness of regulators in their arms race with businessmen, and the truth that there is no substitute for earning power as a means of securing good work conditions.

A union organizer reads the story and thinks, “How careless of the government not to have thought about tip pools, despite its otherwise glorious work! These regulations must be updated. (Again.)” This seems to me not so much wrong — for tip pools, with their potential for disguised pure theft, are probably a perfectly proper subject of government regulation — as ultimately a bit shortsighted.

• Email: ccosh@postmedia.com | Twitter: colbycosh