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Minimum wage in Ontario being hiked?
Jan. 26th, 2007 11:57 amSo, a private bill has been introduced to raise the Ontario minimum wage to $10/hour.
This may sound good on the surface, but I don't think it will actually help.
Why?
Last time the minimum wage went up, companies just hiked their prices due to increased staff cost. Which raises the cost of living. Which devalues the dollar of those employees. Which makes the $10/hour the same as before.
Oh, I know it's more complicated than that. Not all costs of living will go up, but enough of them will that it will 'equalize' and then minimum wage will be back to being almost as little as it was before. This is just a way to devalue the dollar, as far as I can see.
So what could they do to actually change things?
(1) Change the personal deducation (my favourite option). After all, it is not possible to live on the personal deducation currently used in Ontario (or federally, for that matter). If you ask me, people who are earning minimum wage full-time should not be taxed. If it's not enough to live on, how can the government justify taking some of it?
(2) Introduce some kind of set of regulations on distribution of salaries within an organization. Part of the problem is that upper management's salaries continue to increase at a rapid pace, while the rest of the company gets raises at about the rate of inflation. Of course, regulating this would be a NIGHTMARE, and I don't actually advocate it. But this WOULD help. Still, this would be better accomplished through taxation, rather than regulation.
(3) Put some kind of price freeze on companies that employ minimum wage employees for the next year, so that they can't raise prices in response to this. But, this would just delay the effect.
I don't claim to be an economic expert. So please, feel free to point out the errors in my logic. But I just don't see a raise in minimum wage helping matters.
This may sound good on the surface, but I don't think it will actually help.
Why?
Last time the minimum wage went up, companies just hiked their prices due to increased staff cost. Which raises the cost of living. Which devalues the dollar of those employees. Which makes the $10/hour the same as before.
Oh, I know it's more complicated than that. Not all costs of living will go up, but enough of them will that it will 'equalize' and then minimum wage will be back to being almost as little as it was before. This is just a way to devalue the dollar, as far as I can see.
So what could they do to actually change things?
(1) Change the personal deducation (my favourite option). After all, it is not possible to live on the personal deducation currently used in Ontario (or federally, for that matter). If you ask me, people who are earning minimum wage full-time should not be taxed. If it's not enough to live on, how can the government justify taking some of it?
(2) Introduce some kind of set of regulations on distribution of salaries within an organization. Part of the problem is that upper management's salaries continue to increase at a rapid pace, while the rest of the company gets raises at about the rate of inflation. Of course, regulating this would be a NIGHTMARE, and I don't actually advocate it. But this WOULD help. Still, this would be better accomplished through taxation, rather than regulation.
(3) Put some kind of price freeze on companies that employ minimum wage employees for the next year, so that they can't raise prices in response to this. But, this would just delay the effect.
I don't claim to be an economic expert. So please, feel free to point out the errors in my logic. But I just don't see a raise in minimum wage helping matters.
