Monday, 2 October 2017

Is raising the minimum wage best for everyone?

Many people nowadays speak about raising the minimum wage by saying that the current minimum wages are not high enough for anyone to raise a family. They are right.

Imagine if you will what it was like being an employee in Canada in 1951. I was seventeen and my first full-time job was working in a warehouse five and a half days a week. I was paid $15.00 a week after taxes. In 2017, that would be equivalent to $141.65. Fortunately, I was living with my mother who was making $25.00 a week as a hairdresser after taxes. In 2017, that would be equivalent to $236.08. With that money, she had to pay rent and food for her, me and my younger brother. I gave her $5.00 towards my upkeep. Another $5.00 was for my transportation and the remainder was my spending money. We were getting sixty-two cents an hour.

Was what we were being paid sufficient to live on? I know what you are thinking. Prices were far less than they are now. But we should have been paid more for our services without having to skimp.

I later joined the Canadian navy that autumn and was paid $150.00 a month. That in 2017 money was equal to $1,416.48. That was my spending money because my clothes, shelter and food was given to me for free. From a financial point of view by then, I was really in heaven.

When Ontario Legal Aid began in 1964, it comprised of the director, his secretary and me. I was paid $75 a week to conduct investigations for the lawyers. In 2017 money, that would be $594.00. The lawyers volunteered their services.

When I was practicing law many years later, I was charging my clients only $50 an hour. I could have charged much more but my clients didn’t have the money to pay me more. The lawyers were charging much more than I was but they didn’t have the large number of clients I did so in the long run, I made a decent living as a direct result of the volume of clients that came to me every week. 

The minimum wage is a basic labour standard that sets the lowest wage rate that an employer can pay to employees. One of the prime purposes of a minimum wage is to protect non-unionized workers in unskilled jobs; however it can also have influence, directly or indirectly, on the level of compensation of other employees. This is because a minimum wage constitutes a base that employees or their unions may use as a starting point for negotiations with management for higher remuneration. Adjustments to the minimum wage are required from time to time to account for changing economic and social conditions.

Every province and territory in Canada provides for a minimum wage in its employment standards legislation. In the federal jurisdiction, workers covered by Part III (Standard Hours, Wages, Vacations and Holidays) of the Canada Labour Code are entitled to the general adult minimum wage rate applicable in the province or territory where they are usually employed  however, the Governor in Council (ministers in the Cabinet) may still fix another rate by bringing forth a new regulation.

Although general minimum wage rates in every Canadian jurisdiction apply to most workers, some categories of employees are specifically excluded from minimum wage provisions in the relevant statute or regulation. Other employees are covered by a different minimum wage rate. Legislated general minimum wage rates are also often supplemented by special orders, regulations or decrees that apply to particular industries, occupations or classes of employees and in some cases take into account special skills of its employees.

Now we are being bombarded from the tears of owners and general managers along with their shareholders of large and small businesses telling us that they will go out of business if their employees are given larger minimum wages.

Did you hear it? One of my crocodile tears of sympathy for them just dropped on my floor. The amount of sympathy I have for each of these greedy employers is what I would give a serial killer who is about to be hanged.

As to be expected, proposed minimum wage hike divides business owners all over Canada. Some support an increase, saying that the current $7.25 an hour is the same as the federal minimum that is too low in the first place. Others say that if the minimum wages were to go up, it will reach the $15.00 an hour expected by 2019. And others support an increase only for experienced workers, not young part-timers in training. .Are they considering the fact that some of those young part-time in training may have families to support?

Ten per cent of Ontario workers currently earn the minimum wage and 30 per cent earn less than $15 an hour..  If they were paid $15  an hour for forty hours a week’s work, they would earn $600 a week which is $31,200 a year.  Of course, their taxes will be taken from that amount. Nevertheless, that is still a decent wage when considering today’s prices.

Many employees are supporting their families on a wage that just doesn’t go far enough since many of them are raising children, saving up for their education and wondering if they’ll ever be able to get ahead on the monthly budget, let alone own a home.”

The proposed minimum wage increase will be phased-in gradually. It will rise with inflation, as scheduled, from $11.40 currently to $11.60 in October 2017. Then, the government plans to bump it up to $14 an hour on January 1, 2018 and $15 the following year.

In the Province of Ontario, part-time workers will get equal pay for doing work equal to full-time staff, and that the minimum vacation entitlement will be increased. Instead of getting two weeks of vacation, workers will be able to get three weeks of paid vacation a year after five years with a company.

Can you hear them? They are the thousands of tears of the business owners dropping on the floor?

The province’s changes to workplace laws will also establish fairer rules for scheduling, including making employers pay three hours of wages if they cancel a shift with fewer than 48 hours notice,

The Canadian Federation of Independent Businesses (CFIB) and a new coalition of employer groups that includes the Ontario Chamber of Commerce issued statements objecting to the proposed changes. Julie Kwiecinski, a director with CFIB said—

“We are shocked and appalled that the government is broadsiding small business owners with a 32 per cent increase in the minimum wage within only one-and-a-half years. Small businesses, who don’t share the larger profit margins of big business, will be forced to make difficult choices, including cutting hours and jobs.” That is like cutting off your nose to spite your face.

The Keep Ontario Working Coalition, formed in response to the proposed labour law changes, warned that the changes will lead to “unintended consequences, including job losses, rising consumer costs, and economic hardship.” After firing some of the employees, how will that increase consumer costs?

There is real evidence that a higher minimum wage can benefit local economies and lead to job growth. The money earned by the increase of the minimum wages will be spent by the employees who got the increase and invested right back into the business that hire the employees.

Casual, part-time, temporary and seasonal employees who are already getting ripped off with respect to their wages will be given equal pay as full-time employees are for doing equal work

Once an employee works for a company for five years, they will be entitled to three weeks of paid vacation.

Personal emergency leave would no longer only apply to workers at companies with 50 or more employees. All workers will get 10 days per year, two of them paid. Domestic or sexual violence will be included as a reason for personal emergency leave.

Hopefully all of workers in Canada will have these benefits. 

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