Published on Wed Aug 07 2013 http://www.thestar.com
Ten readers weigh in on columnist David Olive’s piece on Ontario’s minimum wage.
Judging by the passionate response to David Olive’s column, Ontario’s minimum wage resonates deeply with a great many people, regardless of how much they make.
The story has generated 780 comments (and counting), representing every point along the political, economic and moral spectrums.
Here is the debate, as laid out by 10 reader comments on the issue:
1. Go ahead and raise the minimum wage. Then another 40,000 workers will be laid off as most of the companies that do pay minimum wage cannot afford them any more. Unemployment spiked after the last minimum wage hike. — westender
2. In 2004, when our minimum wage went up by 25 per cent, the median income rose. Inflation did not rise, unemployment did not rise, business insolvency rose slightly (0.4 per cent), then went back to normal in the following year.
Raising the minimum wage does not cause price increases, unemployment or business failures. It isn’t common sense, but it is reality.
— Punned It
3. It’s not false . . . It has been proven time and time again to be true.
When costs increase, companies find ways to increase productivity either by having fewer workers doing more, increasing use of technology, or possibly shutting down because they cannot compete with the higher costs. Therefore, the total number of absolute jobs will decrease, but the jobs that remain will pay higher — it’s a trade-off.
The problem with minimum wage is that it sets a floor to the supply and demand curve — because of the higher costs, companies will hire fewer employees than they would naturally. So instead of having 10 employees making $5/hour, you would keep your top five employees and give them $10/hour (and lay off the remaining five).
Instead of focusing on how we split up the pie, we need to find a way to make it bigger (become more productive/valuable to our companies) which will lead to higher wages (we need to justify the higher costs to the companies). — TOgirl
4. Is it really about minimum wages? Why not also look at company performance bonus ideas; top management cannot pay themselves large bonuses exclusively without paying everyone else at least 50 per cent above minimum wage. Wasn’t it Henry Ford who saw that paying people higher wages would allow more people to buy a car? What happens when wealth in a country gets too concentrated in too few people? Why not have a 19-1 rule? The top person cannot pay themselves any more than 19 times of the bottom person, like it is at Whole Foods Market. At the end of the day, if society does not feel secure, it can lead to a lot more problems. Good paying jobs help to make people feel safe. — chas999
5. While raising the minimum wage will put more money in the pockets of those affected, there is no ripple effect on those whose wage is slightly higher than minimum. Typically, those wages do not move up, resulting in additional people now earning the new (higher) minimum wage. Somehow, we need to create a ripple effect so all people near the bottom of the wage ladder get a benefit, albeit not as much of a raise.
Secondly, the minimum wage is not the only employment standard that affects workers. There are a wide variety of workers, often seasonally employed (i.e. earning less than $20,000 per year) who are not entitled to statutory holiday pay or aren’t entitled to time and a half for working on a stat holiday or who aren’t entitled to overtime until way more than 44 hours are worked. These are allowed for under the Ontario Employment Standards Act. Closing these loopholes will also help those on the bottom end of the wage ladder. — SuburbanJoe
6. It doesn’t matter what the minimum wage is; no corporation is going to let increased wages cut into their profit margins, so prices will go up to match increased wage costs. One place I worked, the same day the wage went up to $8.75 an hour, the prices were increased, and staff was told to tell complaining customers that it was necessary due to the increase in minimum wage. At another company, when wages went up to $10.25, wages for the rest of the staff were frozen for six months, costing everyone else their semi-annual increase. The company’s excuse: it said it might not be able to survive these increased wages. These are huge companies; both of them are more than just surviving years later. The only way that increased minimum wage would make a real difference is if all prices were frozen for a length of time, and that is not happening. — pepc6372
7. Raising minimum wage higher than the current $10.25 does not take into account that many small shops cannot afford to pay this. So they either do not hire or, if they do take on more staff, it is for fewer hours. Besides, it is not only the raise in hourly amount, there is then also the increase in payroll taxes that goes along with it. Many small shop owners work for far less than the minimum wage. When (then-Ontario premier Dalton) McGuinty raised the level to $10.25, he did not do any favours to the small business owner. Generally these are low skill jobs requiring little experience. So how does raising the wage level ad infinitum help? Politicians who live in the stratosphere of incomes tend to forget that not everyone can pay these inflated wages. — Gracie
8. If only it were as simple as raising the minimum wage by $2 for the lowest wage earners from say $10 to $12. Every employee now making $12 has an expectation of getting a $2 increase also and so on up the wage scale. As a previous small business owner, I know that this is true. For a business with 10 employees, this can quickly translate into $20 per hour; plus the additional CPP and EI portion paid by the employer. For an eight-hour day, the employer has to come up with about $200 per day in additional profit to cover the $2 increase per employee. I have seen this happen many times with a minimum-wage increase where the employer is forced to decrease the number of employees and asked those still working to take up the slack, thus fewer jobs. — I See you too
9. You keep confusing what people “deserve” in a moral sense, with what they earn in an economic sense. If we think people “deserve” more, we can supplement incomes out of government revenues (up to a point). But we can’t just pass laws decreeing that people earn as much as they deserve, if they don’t produce as much as they deserve to earn.
A 40-year-old single mom with four kids clearly needs, and probably deserves, more income than a 20-year-old student. But if they’re doing the exact same job with the exact same level of competence, then they’re going to earn about the same, all else being equal. Wages are not determined by calculating how much people need to live comfortably, and dividing by the number of hours they work. Wages are determined at the point where what an employer is willing to pay meets what an employee is willing to accept. And what the employer is willing to pay has everything to do with what the employee can produce, not with how needy the employee’s lifestyle is. — thinktwice
10. I always viewed minimum wage as an incentive to get a higher education, get valuable experience, and pursue a career in a higher paying field that I could find passion in.
It worked as an incentive. — RAinToronto