From CBC
Critics of Ontario's recently announced move to raise the province's minimum wage to $15 an hour say it will hurt businesses and lead to job losses. But an analysis of more than seven decades of data out of the U.S. suggests the opposite is more likely to happen.http://www.cbc.ca/news/business/minimum-wage-analysis-1.4141311On Tuesday, Premier Kathleen Wynne announced that the minimum wage will rise to $14 an hour in 2018 and $15 in 2019, which prompted howls of protest on behalf of businesses.
How Ontario's minimum wage hike may impact the economy
The Canadian Federation of Independent Business says that small businesses will be forced to cut staffing as a result, and the Ontario Chamber of Commerce warns that the move will discourage investment from corporations, which grows the economy for everyone.But a recent analysis from the Washington-based National Employment Law Project (NELP) says that more often than not, minimum wage hikes create far more jobs than they kill, about 12 months down the line.
"The negative impact on jobs is unlikely to be negative overall," said Yannet Lathrop, a researcher and policy analyst with the organization.
To reach that conclusion, Lathrop and others took official government data from between 1938 and 2009 — a period in which the U.S. hiked the federal minimum wage 22 times, from 25 cents to $7.25 an hour.
Rather than killing jobs, the analysis found that 68 per cent of the time, the employment rate was higher 12 months after the wage hike than it was before.
There's "no correlation between federal minimum wage increases and lower employment levels," the paper says.
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The minimum wage went up to $10 / hour in Tucson so tons of people just turned into minimum wage workers. At a lot of places managers don't really get paid anymore than lower level employees if you figure out their hourly rate. Raising the minimum wage way up isn't going to help. If it was going to then why don't we stop messing around and just raise it up to $50 / hour? Then would everyone's problems be solved?
That is the most disgruntled group. Those that are making just a bit more than minimum wage already and don't see a pay raise themselves. Their pain in this scenario can be understood but is still rather petty and selfish.
It reminds me of this LBJ quote "If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you."
Remove the racial portion and it applies.
At some point I think the law of supply and demand would kick in to where prices would rise.
Let's say a butcher is selling stakes and he gets 100 steaks in a week because that is how many steaks he can get a week for the price he charges customers.
At less than minimum wage, I can only afford a steak once a month. In the place I work there are 20 people getting the same sub-minimum wage I do that also eat steak once a month.
Suddenly we get a raise to the minimum wage and now my 20 coworkers can afford steak once a week.
The first couple times we go to the butcher to get a steak, he cannot meet all the demand because he can only get 100 steaks a week at a certain price.
After two weeks the butcher decides he is losing money by not meeting the demand of his customers. He calls his suppliers to get 150 steaks a week. His supplier says that everyone across the land is demanding more steak too. The supplier can only give the butcher 150 steaks a week if the butcher pays a bit more for each steak. The butcher not wanting to turn away customers agrees to the higher price.
To keep making money on the steaks the butcher raises the price he charges customers for each steak.
That week the butcher is able to sell all the steaks because some customers gladly pay the higher price to get a steak and other customer switch to hamburger because they do not want to pay the higher price.
But now the butcher needs to request more hamburger from his supplier. And so the cycle goes on until all prices for edge higher to balance supply and demand.
In my country. 10$ is a minimum DAILY rate, not per hour. :) And we are not even a third world country but in the middle of freaking Europe.
He forgot to point out that minimum wage is currently $11.60 which is already a huge increase... Increasing it by another 50% will make it even harder for employers to take on apprentices (or more staff).. it also doesnt take in to account the fact that the employer will have to match elevated EI and CPP contributions AND pay a higher vacation pay. All this will do is make people hire less and the people they do hire will all be classified as temp/part-time. Another brilliant idea by Wynne - if she was aiming for rapid inflation - shes on the right track.
Boosting minimum wage doesn't do anything except cause inflation. You're getting paid more but your money is worth less.
False.
Where do you think the money comes from? The cost of goods and services will increase due to paying higher wages. A knock-on effect occurs where businesses in general will have to increase the cost of their services due the increase in cost of other services. Sure people get paid more but it causes a blanket increase in the cost of good and services.
What you are describing is false. It doesn't happen. Look to every other time the minimum wage is raised. The fear mongering doesn't hold any water.
The money comes out of company coffers where it was sitting and doing nothing. It then goes to the bottom who spend it all and those companies then have more customers. It creates a better economy with more prosperity for all.
That's what has happened every time.
Not all businesses have great profit margins. You are making an assumption that the business will still be able to make a profit once higher wages kick in. Not all businesses can and that's just a fact. So they will need to increase the cost of their services or reduce costs elsewhere. I know a few businesses will try cut costs but I can also assume that a lot will increase cost of their service. Small businesses get hurt the most by this.
It will be a net benefit. Tighter margins on more volume still works out.
Come on mate construct an argument, you're not proving anything by just saying your opinion and not backing it up.
Also I'm really surprised that someone with your reputation level can't make an argument without using a fallacy.
LOL would you care to name the fallacy?
Please dont use logic when talking to a libtard. It doesnt work
logical fallacies are not logic.
What happens to the small businesses, the “mom and pop” shops, the entrepreneurs, the people in this life that are trying to make a comfortable living for themselves without having to work in the corporate world? For an example let’s take a pizza shop. Say the owner has been able to balance his costs and profit so he can live a comfortable middle class life. Now, with the minimum wage increase, his costs have increased, decreasing his profits. At this point his options are: sell more product, increase his prices, cut costs in his personal life, get rid of some employees, or sell/close the business to pursue a different career.
Selling more product will increase both cost and profit, and it may take some time going negative before he finds the correct balance. He may not be in a position to afford this option. Again he is not wealthy and is only living a comfortable middle class life. He probably does not have enough in savings to cover this.
Increasing his prices may work to gain his balance again, but may also result in losing customers due to the increased prices. Also, from what I have followed so far in this post, prices are claimed to not increase because of minimum wage increases.
Cutting costs in his personal life would decrease his quality of living. I throw out this option because the premise behind raising minimum wage is to better the quality of living.
Getting rid of some employees may work as well, but this would also have some negative effects that may throw off the balance. Again, this would also decrease quality of life for the employees that were terminated.
I am far from as knowledgeable about the situation as the people debating this in the comment thread and am ultimately posting this as a question. This situation definitely seems negative, but I understand that I may have missed some factors into this.
The article states, “The Canadian Federation of Independent Business says that small businesses will be forced to cut staffing as a result”. It never refutes this claim. I would like to add that it seems the small business may close down as well. Are we to look at this situation as a casualty to the “greater good”?
How do you down vote? This poster has no economic IQ. Hes just a cheer leader for the liberals.
Damn those pesky liberal facts. They always get in the way of ignorant bliss.
Hard to argue against data, but in a situation where knowledgeable and skilled employee A is now paid slightly more than entry level employee B due to the minimum wage increase, what is the justification for employee A's lack of compensation relative to the value he adds compared to the little value employee B adds?
If your skilled labor job isn't paying as much as an easier unskilled job why would you stay? If people move to easier, but equally paying jobs, then supply and demand kicks in forcing employers to raise wages for skilled employees.