Increasing the minimum wage

[lio45]

Originally Posted by niwell

Yes exactly. $15 an hour in Toronto really isn’t that much. $15 an hour in rural Ontario is.

In the U.S. some states fixed that problem by letting cities set higher minimum wages. Seems a no brainer to do that here as well - the provinces where the main cities are are all geographically large with sizable hinterlands.

[MonctonRad]

Originally Posted by lio45

In the U.S. some states fixed that problem by letting cities set higher minimum wages. Seems a no brainer to do that here as well - the provinces where the main cities are are all geographically large with sizable hinterlands.

Sounds like a reasonable compromise.

[J81]

Originally Posted by vid

What if I told you it was possible to increase revenue without increasing prices?

So sell more with less employees! Right! We all know that dont we! So less people make more money!

[J81]

Originally Posted by Xelebes

Cost to produce goods = DM + DL + MOH. A 30% increase in wages does not mean that the cost of production will increase by 30% unless you expect all of the cost to be in DL.

The cost of production does not increase 30% because your minimum wage went up by that same amount. But every aspect of getting raw products into your home is going to go up essentially making the products u buy more expensive. Certainly not by 30% but definitely more then inflation.

[manny_santos]

Originally Posted by someone123

Are people really stuck at Starbucks because they don't have time to look for the 9-5 jobs, or are they stuck because there aren't enough 9-5 jobs? I suspect the second factor is the bigger one.

I think the economy has much deeper problems and tweaks are unlikely to do much.

I spent several years in those kinds of jobs. In my case, it wasn't a lack of time, it was the economy at that time. I was in London trying to make ends meet between 2009 and 2012. Eventually I gave up and left the city in large part because there were simply no jobs in my field.

[manny_santos]

Originally Posted by lio45

In the U.S. some states fixed that problem by letting cities set higher minimum wages. Seems a no brainer to do that here as well - the provinces where the main cities are are all geographically large with sizable hinterlands.

I do have concerns with that type of arrangement - if, say, Toronto had a higher minimum wage than the rest of the province, it could have several unintended consequences:

- More people from outside Toronto flocking into the city looking for work, putting undue pressure on the local labour market while potentially creating labour shortages in some other communities (especially neighbouring municipalities such as Markham or Mississauga)

- Young people who live at home and don't pay rent would earn more money than young people in the same situation elsewhere in the province, just because they live in Toronto, which would create greater income inequality in the province. It would also be a surefire way to create more anti-Toronto sentiment, especially in parts of the province that have high cost of living due to higher hydro rates or higher auto insurance rates (particularly nearby cities such as Brampton). On the flip side, Toronto would not necessarily be the only city that could enact a higher minimum wage; other cities with high rent costs such as other GTA municipalities, Ottawa, and Kingston would be free to do the same, and their citizens can and should push for it if Toronto had a municipal minimum wage.

I suppose I would be in favour of it as long as all Ontario municipalities were given the power to increase their minimum wage, and not just Toronto. (Toronto already has special legislative powers that other Ontario municipalities do not have, so this isn't unprecedented)

[Taeolas]

That sort of plan is why I think it should be based on some metric that Stats Can can measure (a Cost of Living index or something), and be regionally based. How granular the regions are would vary somewhat, but ideally it should be set up so that it isn't all that easy to live on the fringe of one reason and commute in to another region.

Even if that is the case, as long as the process is automatic, it means that given time, the fringe will move because the cost of living of people in the fringe will rise to reflect the higher income available in general.

Plus living on the fringe and commuting into a higher minimum wage area would mean more commuting costs ,either in time or actual costs (is it really worth travelling an hour or two in traffic or on transit each way per day just to earn an extra buck an hour at a minwage job?)

As far as "people living with their parents to save money".... GOOD. All the better for them if they have that option. At some point they will want or need to move out anyway, and they'll hopefully have the nestegg built up to go on their own.


Frankly, I don't care what people earn, whether they are a burger flipper, a janitor, a paramedic, a lawyer or a doctor. My own minwage days are decades behind me. But I am still all for people being able to earn enough at a job to survive in their region AND to not need to devote their entire lives working. If you need to work 100 hours/week just to earn enough to live where you live, then something is very wrong. (That is generally speaking. If you are a bachelor looking to live in a McMansion while working in a minwage job, you get no sympathy from me; but a basic apartment or condo at that pay rate should be attainable while not having to devote your entire life to work)

[ssiguy]

Many responses have centered around the idea that the cost of living will go up so it`s a zero-net game. The reality is that the vast majority of people making minimum wage are in the restaurant/service sector. Yes the price of your restaurant bill will go up but since when is going to a restaurant an essential of everyday life? It`s not like rent, insurance, or hydro which are necessities. It can be said that some food will go up due to the increases effecting grocery stores but the vast majority of workers in those fields already make significantly more than minimum wage already.

I do agree that a flat rate for some provinces makes no sense. It certainly does for smaller provinces or where the cost of living between the larger city and rural/small town areas are not significant but in Ontario or BC it`s ridiculous that the minimum wage in Price George or Sarnia is the same as Vancouver or Toronto.

The idea of raising the minimum wage at the rate of inflation has a solid merit but the problem is that is what has also gotten us into this situation. At $11.50/hour, the minimum wage is the same as it was in the 1970s........there has been no net gain after inflation but remember inflation doesn`t take into account food or gas prices which are considered too volatile nor real estate which in some areas has grown at 5X the rate of inflation.

If most minimum wage earners are younger people that also puts them in a dilemma as the cost of tuition has soared in most provinces well beyond the rate of inflation leaving them with huge debts to pay off. This is made worse by the fact that the educational requirements of jobs today are much higher than they were in the 1970s. Back then a BA was a one-way ticket into a well paying civil service job with endless benefits and job for life security while today it qualifies you for little more than a minimum wage job.

[vid]

After nearly two whole pages of dis-cussing an Increaing Minimum Wage, Pat, Can we buy an S?

Originally Posted by J81

The cost of production does not increase 30% because your minimum wage went up by that same amount. But every aspect of getting raw products into your home is going to go up essentially making the products u buy more expensive. Certainly not by 30% but definitely more then inflation.

Cost of shit always goes up. You should see how expensive plastics have gotten with the higher oil prices. Labour isn't the only factor in cost of doing business by far, it's rarely even the highest. Most of the price increases in food isn't related to wages, it's related to gas, and that's unrelated to minimum wage because the only people in that industry paid so little are pumping it at the station with a 0.9% profit margin. Increasing numbers of truck drivers are being paid low wages but the cost of shipping only goes up.

[gunnar777]

Originally Posted by lio45

In the U.S. some states fixed that problem by letting cities set higher minimum wages. Seems a no brainer to do that here as well - the provinces where the main cities are are all geographically large with sizable hinterlands.

Then on the other hand, you have economic success stories like Australia having a minimum wage set for the entire, massive country. It's currently $17.75 CAD (Nearly all jobs are covered by a national collective bargaining agreement called an award that provides a higher wage, but the minimum wage is there as a safety net for the few people not covered by an award.)

[Doug]

Originally Posted by lio45

In the U.S. some states fixed that problem by letting cities set higher minimum wages. Seems a no brainer to do that here as well - the provinces where the main cities are are all geographically large with sizable hinterlands.

Except that produces unintended consequences. I know first hand from time spent in Seattle and the Bay Area thst higher minimum wages in the cities drive customers to the suburbs, especially for restaurants, without those laws.

Australia has a very high minimum wage of $17 something with premiums for evenings and Sundays. The result is many stores close on evenings and Sundays, hotels are only minimally staffed 9 to 5 etc. It doesn't affect me as I avoid restaurants due to the expense and generally DIY as much as I can.

Minimum wages were much worse in 80's and 90's. I worked at McDonald's in the 80's when I was 14 and started at $3.05/hr.

[ssiguy]

People often point to Aus/NZ of examples where an extremely high minimum wage is viable but it is not a fair comparison. The fact that they both have the 2 highest minimum wages in the world and the fact that they are the 2 most physically isolated countries in the world is not coincidence.

Aus/NZ can set economic polices that are vastly different because no tourist goes to either country without meg-bucks in their pockets because getting there is very expensive and far and hence no one goes there for a long weekend or one week vacation. Conversely Aussies and Kiwis don`t travel outside the country for short vacations either so more of their tourist dollars stay home.. They don`t have the issue of `if we are too expensive, people will go elsewhere for their vacations` like you do in the rest of the world. They also don`t have the problem of people crossing the border to buy cheaper goods.

It has also led to an outrageously high cost of living and put pressure on many key industries. Australia, like BC, has been living off of natural resources and housing for the last 25 years much to the detriment of other key sectors. Australia has managed to high-labour cost itself out of many industries and the key one is automotive. This year, the very last car manufacturing/assembly plant closed in Australia marking the first time in 110 years that Australia no longer builds any cars or trucks.............that is not a path Canada wants to follow.

As proof of their minimum wages not solving their equity and poverty problems, AUS/NZ both have GINI Indexes higher than Canada and most of Western Europe.

[lio45]

Originally Posted by gunnar777

Then on the other hand, you have economic success stories like Australia having a minimum wage set for the entire, massive country. It's currently $17.75 CAD (Nearly all jobs are covered by a national collective bargaining agreement called an award that provides a higher wage, but the minimum wage is there as a safety net for the few people not covered by an award.)

That seems awfully low considering what I've heard about the CoL in Australia (my ex, still a good friend, lives and works there).

Also, it's not anything novel - a low-ish minimum wage set for the entire massive country is usually what everyone has (USA, Australia...)

THEN, on top of the basic minimum imposed to everywhere else around them, the high-cost places like Toronto or Sydney may, or should, be able to decide that $17.75 CAD makes no sense and isn't a living wage, and require something higher than the minimum that applies to the hinterlands. Even if they don't, though, I expect that Sydney wages are still higher than in rural areas. My ex earns in the six figures already, and she hasn't worked at her current job for very long.

A minimum means just that. No rule against paying low-skill workers more than that minimum, if you're in a skyhigh CoL area where it wouldn't be possible to pay them any less than that anyway.

[lio45]

Originally Posted by Doug

Australia has a very high minimum wage of $17...

Again, I don't think I agree that that's "high". I'd say that's actually "low", i.e. you need to work a hell of a lot more in Sydney to ever amass enough to buy a house than you need to at minimum wage in Montreal, etc.

[Doug]

^That is all very true. It also leads to a DIY culture. It is very rare in Australia to hire out out tasks like yardwork, painting, furniture moving etc due to the insane cost. Many hotels have self check in outside 9-5, charge extra for lock out service and housekeeping and require guests to remove there often garbage. The high minimum wage also keeps teenagers out of the job market as the typical North American teenaged type jobs are often filled by adults. My one son went to Colorado to work during his time off school as finding something local is so challenging.

[gunnar777]

Originally Posted by ssiguy

People often point to Aus/NZ of examples where an extremely high minimum wage is viable but it is not a fair comparison. The fact that they both have the 2 highest minimum wages in the world and the fact that they are the 2 most physically isolated countries in the world is not coincidence.

Aus/NZ can set economic polices that are vastly different because no tourist goes to either country without meg-bucks in their pockets because getting there is very expensive and far and hence no one goes there for a long weekend or one week vacation. Conversely Aussies and Kiwis don`t travel outside the country for short vacations either so more of their tourist dollars stay home.. They don`t have the issue of `if we are too expensive, people will go elsewhere for their vacations` like you do in the rest of the world. They also don`t have the problem of people crossing the border to buy cheaper goods.

It has also led to an outrageously high cost of living and put pressure on many key industries. Australia, like BC, has been living off of natural resources and housing for the last 25 years much to the detriment of other key sectors. Australia has managed to high-labour cost itself out of many industries and the key one is automotive. This year, the very last car manufacturing/assembly plant closed in Australia marking the first time in 110 years that Australia no longer builds any cars or trucks.............that is not a path Canada wants to follow.

As proof of their minimum wages not solving their equity and poverty problems, AUS/NZ both have GINI Indexes higher than Canada and most of Western Europe.

Some of this is not true, speaking as an expat who lived in Aus for 5 years and recently returned home. Cost of living is simply not outrageous - though many in Aus are somewhat proud of their perceived high cost of living (if things are expensive here, that means we must be rich if we can afford them). Housing in Sydney is expensive, with detached house prices a bit below Vancouver's, apartment prices higher, and rent prices higher than Toronto's. Melbourne's home prices are a bit above Toronto's, while rent is less than Toronto's rent.
Meat/dairy/staple foods are cheaper in Aus, and eating out is cheaper, with tax included in prices and no tipping expected.
So is car insurance. Purchasing a car is slightly more expensive, unless you're purchasing a luxury car of over $60k, then a luxury tax is added that makes cars much more expensive. Income and sales taxes are lower, and there are no deductions on paycheques apart from a single federal tax. Gas prices are slightly higher than Toronto's, and lower than Montreal's.
Auto insurance is much cheaper, as are auto registration fees, as are mobile phone bills. Taking long distance trips on Sydney or Melbourne's extensive electrified train systems is way, way cheaper than comparable rides on GO/RTM. Domestic airfares are much, much cheaper. Welfare payments, administered federally, are much higher than those offered by any province in Canada. Finally, a Big Mac is cheaper in Australia than in Canada. The list goes on. Life is not more expensive in Australia, and those who think it is might also be the sort of people who still hold the 1980s/1990s view that Japan is pricey, even though inflation has been almost nonexistent since 1997 (net result: Japan is cheaper than Canada for just about everything).

The Fed and South Australian governments ultimately did not continue to prop up the automotive industry, although to be fair, that industry constituted a much smaller portion of Australia's GDP than it does for Canada.

Conjecture at this point, but I saw far fewer homeless people in Sydney and Melbourne than I do in Toronto, Montreal or Vancouver. I also liked having a friend who was a full-time worker at McDonald's and who didn't think an annual trip to Europe to visit family was unusual. She had 4 weeks of paid vacation, just like everyone else, and a liveable wage. Airfares are cheap these days, so why the heck not?

[Doug]

Originally Posted by lio45

Again, I don't think I agree that that's "high". I'd say that's actually "low", i.e. you need to work a hell of a lot more in Sydney to ever amass enough to buy a house than you need to at minimum wage in Montreal, etc.

Sydney, and increasingly Melbourne, are turning into a London or New York or Vancouver - people who work for a living need not apply. No minimum wage will make it affordable. Many low end jobs in big cities like Sydney and Melbourne are filled by gap year "students" and backpackers who don't care how little they make as they have parental backstops.

Australia will suffer a major real estate bust at some point. I convinced my significant other to sell the house last year and lease it back. The market is so insane that such arrangements are becoming commonplace. She invested the proceeds in blue chip dividend stocks where the payout more than covers the lease. The market is that disconnected from reality. Offshore investors have so much blind faith in real estate they ignore the math.

[gunnar777]

Originally Posted by lio45

That seems awfully low considering what I've heard about the CoL in Australia (my ex, still a good friend, lives and works there).

Also, it's not anything novel - a low-ish minimum wage set for the entire massive country is usually what everyone has (USA, Australia...)

THEN, on top of the basic minimum imposed to everywhere else around them, the high-cost places like Toronto or Sydney may, or should, be able to decide that $17.75 CAD makes no sense and isn't a living wage, and require something higher than the minimum that applies to the hinterlands. Even if they don't, though, I expect that Sydney wages are still higher than in rural areas. My ex earns in the six figures already, and she hasn't worked at her current job for very long.

A minimum means just that. No rule against paying low-skill workers more than that minimum, if you're in a skyhigh CoL area where it wouldn't be possible to pay them any less than that anyway.

Well US states can opt out of their Federal Minimum Wage, while Australian states cannot. There are other considerations with the Australian min wage, including a required 25% "casual loading" to be paid on top of a worker's salary if they are not employed full-time. So for example, if a worker's award is $20/hour, casual loading will provide them with an additional $5/hour for a rate of $25/hour, if that worker were not employed full-time.

If a worker works past 9pm on weekdays, there's a penalty rate of an additional 25%, on Saturdays all day, the rate is 50% plus 25% for working after-hours. Sunday's penalty rate is 50% - 75% depending on award (75% if covered by minimum wage). Australians are keenly aware that on a Sunday, their barista might be making $38-$40/hour depending on whether their role is receiving either the level 2 or level 3 food and beverage attendant award, but from my experience, they seem happy that this worker is thriving and not struggling -- it's just a different mentality than we generally hold here in Canada. I learned this the first time I expressed a view that this seemed "a bit high" at my Sydney office - it was made very clear to me that my thinking was "terribly American", and that I must have felt that wealth was not to be shared equitably.

I do find it common for some here to jump all over the Australian wage laws and insist that industry must be suffering or something else has to give, but this is just not the case. Their unemployment has been lower than Canada's for many years now. It is not difficult to find work. If there are fewer cashier jobs there, and more self-checkouts, so be it, as long as unemployment stays low.

[ssiguy]

Again Aus/NZ are physically isolated so they can set their domestic economic policies in isolation which other countries can't.

Australia also has a slightly higher GINI Index than Canada so clearly higher minimum wages are not a panaces. If it was just a matter of raising minimum wages to increase wealth and decrease inequity than every country on the planet woulkd be offering $20/hr in minimum wage.

Very high minimum wages can also distort skills training. Alberta say this in it's boom where wages were soaring while educational attainment actually fell. Many young people didn't see the point of spending a fortune on their educations and defer all that income when they could make more with their grade 12 education swinging a hammer in Fort McMurray than being a nurse or manager in Calgary or civil servant in Edmonton. It's fine while it lasts but when the boom ends you end up with fewer skilled people.

I think all workers deserve a 'living wage' but I think the problem is where provincial governments set wages provincially as opposed to regionally within their own province. As I stated earlier, it's ridiculous to have the minimum wage the same in Prince George as it is in Vancouver or Sarnia as it is in Toronto. The gap can't be too grotesque but should be at least 10%.

[SpongeG]

I don't know if this fits in the discussion but I will throw it in.

If you go to any Subway restaurant in Vancouver, you are lucky if there are 2 people working, during the lunch and dinner rush you will likely have 2 people, outside of those times, its always one person working on their own, doing the sandwich, taking the cash etc and as a customer you can end up waiting a long time if there are numerous people ahead of you. So i just don't bother to go knowing what could be fast food can drag into a 15 or more minute ordeal.

Anyway in a small town of 3000 people in remote Northern Alberta, I often stop at the subway there and there are never less than 3 people working at all times its open, and there are times when I have been in and there are 5 people working, one starts the sandwich than passes it on to the next person and a 3rd person handles the payment, while 2 others are cleaning and doing whatever else. And i am often the only customer in there.

Perhaps the operating costs are cheaper up north but they can afford to pay more staff for fewer potential customers than a bustling city like Vancouver where there is always a long line up and one of the reasons I avoid going there in the first place. A higher min wage would be nice in Vancouver but either the owners are too cheap to hire enough staff or there are not enough job seekers? would an increase make things better or worse for Vancouver employers