Review of The Minimum Wage in Canada

We are a group of concerned first-year University of Guelph-Humber students, writing to you to discuss the current situation of minimum wage in Canada. The current minimum wage offered to Canadian citizens is unsustainable to efficiently live from. The cost of living, inflation and hour cutbacks negatively affect the population. These factors create barriers for those living off minimum wage to make ends meet and support themselves or their families. As University students we see our fellow citizens struggles in the media, on the streets, and in our personal lives.

Background/ Research: On November twenty- second; shortly after Premier Wynne’s government announced its plans to raise Ontario’s minimum wage, the Ontario legislation passed Bill 148, the Fair Workplaces, Better Jobs Act. This required employers to implement significant changes within the workplace. Including, the increase of hourly minimum wages, effective as of January first to be: fourteen dollars, thirteen dollars and fifteen cents for students and twelve dollars and twenty cents for liquor servers (Government of Ontario, 2018). Unfortunately, this change has proven to be detrimental for citizens of Ontario. This is evident as it has contributed to approximately fifty-nine thousand job losses within two- thousand eighteen, (StatsCan, 2018), and, this number is estimated to continue growing, resulting in approximately sixty- thousand job losses by two- thousand nineteen (Canadian Press, 2018).

Moreover, with the increase of wages follow negative economic consequences. In particular; inflation, which is recognized as harmful for both consumers and businesses. Furthermore, approximately sixty percent of minimum wage workers are youth workers (ages fifteen to twenty four). However, wage increase has prompted a dramatic decrease in the youth employment rate. Having less experience and being more vulnerable allows businesses to easily let go of these workers. This is unreasonable as students often need minimum wage jobs in order to afford their education.

Therefore, this change has established, and will continue to establish itself as detrimental for Ontarians. Prior to this, the minimum wage was: eleven dollars and forty cents, ten dollars and seventy cents for students, and, nine dollars and ninety cents for liquor servers. This suggests that there has been a thirty- two percent increase of wages in twenty eighteen. With this change implemented, Ontario has reached its all time high. In addition, amongst the ten provinces and three territories, Ontario has the highest minimum wages, with Alberta at thirteen dollars and sixty cents, and Northwest Territories at thirteen dollars and thirty-six cents (Payworks Canada, 2018). Ultimately, Ontario’s new policy is jeopardizing the quality of life for its citizens. This is evident as increasing hourly minimum wages has created, and will continue to create more problems than it can solve. Thus, changes should be developed and implemented for a better future.

Current Status: As of November twenty-second two-thousand and seventeen, the government of Ontario has passed the Fair Workplaces, Better Jobs Act. As the economy grows in Ontario, the government has chosen to focus on how they could grow alongside. Regarding laws, Ontario has decided to improve workplace bills. One widely conversed problem would be the increase and or decrease of minimum wage. Previous to the Act being passed, Ontario's minimum wage was at eleven dollars and forty cents an hour. A barely liveable income for many of the the citizens of Ontario. Since then the general minimum wage has increased to fourteen dollars an hour starting January first, two thousand and eighteen. As a follow up on January first, two-thousand and eighteen the minimum wage then again will be raised another dollar, to fifteen dollars an hour. While liquor servers are still at a minimum wage of twelve dollars and twenty cents an hour. This not coinciding with how little tips they may be making. According to Ontario’s new premier Doug Ford, he plans on freezing minimum wage at fourteen dollars putting an end to the build up of Ontario's one dollar minimum wage increase in January. (Government of Ontario, 2018)

Key Considerations: Low income can lead one to many troubling situations. Living conditions can become crucial as a low income can be tied to poor nutrition, poor housing and poor mental health. Citizens maintaining a low income are found to have a strong decrease in health whether they be part time or full time. To keep up with rent or any other consecutive cost one must budget out other day to day amenities such as meals. Cutting down on meals can only cause poor nutrition without a remedy. Luckily, as citizens we have universal health care, but what does one do if they need further costly remedies like medications?

When it comes to Toronto’s housing market the costs are not minimum wage friendly. According to the Urbanization research firm, Toronto's rent is averaging at around two thousand dollars per month, making Ontario one of the most expensive provinces to live in. The average full time worker in Toronto barely makes two thousand dollars, averaging just over the one thousand dollar mark. Leaving Ontario's citizens with past due rent or dept hoping to make ends meet. Mental health has become a widely talked about problem in Ontario. How is it the statistics of people with mental health is still so high? Yes, there are many other factors as to why so many people are suffering from mental illnesses. However, much of this problem is do to low income. The feeling of not being able to feed your children, not being able to meet next months rent and so on can result in people feeling worthless. This feeling will only lead on to trigger depression and other severe mental illnesses.

Other Jurisdictions: Taking a look at surrounding provinces and their effort to tackle the issue on hand provides an additional outlook to the situation. The rates of minimum wage vary from province to province ranging between ten dollars and fifty cents to fifteen dollars an hour. Similar to Ontario, many provinces have followed suit by ensuring the set minimum wage at a respectable rate to help sustain living conditions. However three provinces in particular have taken extra measures in order to stabilize the cost of living, in their respective regions, to households that live primarily off minimum wage earnings. Within the Maritime provinces Nova Scotia plans their path to sustainability by allowing many employers to pay employees according to the work they produce rather than minimum wage. This agreement is addressed as Piecework (Government of Nova Scotia, 2017). Setting the standard of minimum wage at ten dollars and fifty cents ensures that every employee doing the bare minimum still should not receive a lesser pay. All employees being paid at minimum wage are entitled to receiving similar payment if the production of their work adds up to a higher pay (Government of Nova Scotia, 2017). Moving along to the prairies, Alberta's method of maintaining living standards is seen through the increase of minimum wage alongside the reduction of business taxes.

The approach that is taken helps low-income earners while providing small businesses with the ability to thrive. Not only will small business taxes be reduced from three percent to two percent but there will be support programs to assist the needs of these businesses (Government of Alberta, 2018). The government of Alberta states that there will be thirty-four billion dollars dedicated to aid infrastructure of families and businesses (Government of Alberta, 2018). The Summer Temporary Employment Program, also known as STEP, will be reinstated and implied with more force aiding employers with additional funding when hiring high school and post-secondary students (Government of Alberta, 2018). This program additionally provides the student employees with a stepping stone to gain the skill set to help their future endeavours.

The western region of Canada is known to be one the most expensive provinces to live in. British Columbia takes on the challenges of minimum wage by introducing the Fair Wages Commission (Government of British Columbia, 2018). This approach uses a ladder method that slowly increases the rates of minimum wage annually; aiming to reach fifteen dollars and twenty cents as of two-thousand and twenty-one. Living Wage is the ideal income two members of a household should earn in order to meet living standards. According to the British Columbian government, four small increases of pay, over the span of four years, will fill the large gap seen between minimum wage and living wage. Of those earning minimum wage, in this province, sixty-two percent are women looking to attain an additional income for their families (Government of British Columbia, 2018). The slow increase, somewhat like Alberta's approach, allows both business and employees to keep up and cope with the change over a stretch of time.

Options: Raising minimum wage seems like a good idea, until the community begins losing money, and the economy gets disrupted. For example, raising minimum wage increases high school dropout rates, because kids do not need to go to school if they think they are making enough to get by, thus creating a less educated generation (Doyle, 2018). However, the children dropping out of school have not considered the inflation that goes hand-in-hand with the raise of minimum wage. Grocery shopping, property taxes, bills, cars; the prices will all increase. Raising minimum wage will also influence employers to cut hours and benefits (Bouw, 2018). Employers will also rely on technology to get the job done, rather than hiring employees (for example, in factory work, the employer might invest money into a better machine rather than hiring a new employee).

The raise of minimum wage will also influence employers to use international labour where minimum wage is lower or non-existent. The international labour will come from third world countries, where factory workers will be getting paid much less to make the products and ship them over to North America. The increase in international labour will also make it more difficult for North Americans to find a reliable job. Additionally, raising minimum wage could affect people who are already making above minimum. The coworkers who are only making minimum wage will be getting a pay raise, but the employees who are making above minimum wage may not. Therefore, when inflation occurs this employee is technically making less money because he or she will be using more of her pay to afford her groceries, taxes, bills etc. Entrepreneurs and small businesses are also affected by the raise in minimum wage, because it makes a business more difficult to start up and maintain. Products are more expensive, hiring too many people can hurt the businesses budget, and it ultimately takes longer for the business to flourish.

Therefore, keeping minimum wage the same will help to prevent inflation, high school dropouts and will make it easier for future employees to find jobs. Lowering minimum wage will potentially reverse the issues that increasing minimum wage has caused. Lowering minimum wage will give more and more people jobs, make employees more money, give employees more benefits and hours, and push companies away from technological help and encourage them to use employees instead. As of now Minimum wage should not be raised again, because it's not only bad for the employees, but for the employer's and small businesses as well, making it more difficult to hire new employees and budgeting the business properly without causing a deficit. Conclusion: Minimum wage is not at an efficient rate for individuals to lead a successful and healthy lifestyle. People are living with insecurity, unsure of how much money each month will bring. The fear these people have is relevant and unfair to live with. Many of these individuals struggle to provide for themselves, let alone a partner or family. Minimum wage needs to change to look after those who are living paycheck to paycheck.

Recommendations: After outlining various issues, there is an obvious solution. To better serve our country’s population, we need to raise our minimum wage. There are many positives not only for the population but also the economy. When the government raises the minimum wage, it will put more money in the pockets of the workers. In turn, the workers will buy their goods from local businesses, which creates a positive and stable economy (“CBC,” 2018, para. 3). Additionally, inflation will occur regardless over time (Mr. M, n. d. , p. 1). Increasing the minimum wage will allow the population to afford the products they need for survival. Increasing minimum wage will also reduce the government welfare spending (Mr. M, n. d. , p. 1). When people begin making more, over time they will provide themselves and seldom rely on government services such as welfare. This has positive effects on both the population and government. The government will save money in a different sector of the economy, while in turn assisting those who are struggling to make ends meet. Furthermore, its estimated there will be an increase in productivity from workers (Mr. M, n. d. , p. 1) If an individual is being paid more for the same hours, they are willing to work harder and more positively. This, in turn, benefits the employer by having happier and highly productive employees.

The increase in productivity will also mean more money being made, which benefits the economy. Finally, increasing the minimum wage will present a healthier population (Mr. M, n. d. , p. 1). This is done by people being more willing to visit a doctor sooner if issues arise regarding their health. Their previous fears of being unable to afford certain practitioners due to lack of benefits or pocket money will decrease. Some of these can include; an air cast for a broken bone, optometrists and dentist appointments. Overall, Canadians deserve better pay and it is easily attainable for the government to achieve and attain.