Monday, 15 January 2018

Minimum Wage Ontario

One of the big topics of the New Year in Canada, or at least Ontario, is the rising minimum wage. Now as of last year the average minimum wage around the country was roughly 11.00$ on the whole, with only the province of Alberta and the territory of Nunavut having wages above 11$ at 13.60$ and 13.00$ respectively.

Ontario's minimum wage hike will be bringing minimum wage from 11.60 to an even 14.00 which means minimum wage workers will be earning about 1.90$ (rounding to 2$) extra in their paycheck. Then the next year it will rise to 15$ on the nose. This will make Ontario the highest paying province when it comes to minimum wage.

The question of course, is that a good thing?

You will find varying answers to this.

On one hand many people act as though this will destroy small businesses and send prices sky high in ways that are unimaginable. Some say that this will probably only inconvenience businesses slightly and make the workers richer. Personally, I think the truth is somewhere in the latter end of the conversation.

One of the most immediate effects it seems has been to bring Tim Hortons into conflict with the Labor Ministry in Ontario as they attempt to cut worker benefits to "compensate" for a pay raise. I have heard that rather than being the actions of a few "rogue managers" as Tim Horton's parent company Restaurant Brands International, claims, this is the norm across the board. It seems that this is taking place across Ontario as the company (or at the very least managers) gets greedy. Or perhaps, they're merely not as efficient at running their stores as they might otherwise have people believe.

This has been the biggest piece of news (especially with how quick the company is to do it) but with this pay hike being new, it might have made more sense for franchises to wait before pulling benefits. With other businesses though, the news seems to be taking longer to filter in as some companies seem to be hedging their bets. Undoubtedly this will raise labor costs (especially for small businesses) across the province. Indeed it seems that some have already complained that it will. Though it also comes with a litany of other advantages for employees across the board.

What we should really ask, is will this be good for the economy? Recent studies, done in 2015 and in 2016 have shown that, in all likelihood, yes it will. Job rates are probably not going to go down, and minimum wage workers will most likely be able to afford to do more with their purchasing power. Over the course of the wage raises this will mean that the average worker will be able to invest more in the economy, and productivity could even go up as workers are simply able to afford more. Which we should see as an overall boon.

Forecasting economic productivity though, is like reading so many tea leaves, and it is impossible to say for sure. Though I'm sure the average worker will be asking themselves, what could I do with even a few extra dollars from my wallet? Hopefully, that will be the question businesses ask as well.

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