During the State of the Union address (SOTU) President Obama urged employers and governors to raise the minimum wage to $10.10. Ontario’s Premier Kathleen Wynne acted and raised the minimum wage for her province to $11 from $10.25.
While the debate in the US is ongoing on the effect of raising the minimum wage on employment and the economy, Kathleen Wynne grabbed the bull by the horn. There is mixed reaction among the business community, but nevertheless Wynn intends to introduce legislation that would tie the minimum wage to inflation in future years.
“In this calculus, we need to be concerned about small businesses … At the same time, we have to balance that with the need for people to have a living wage,” Ms. Wynne said Thursday at an inner-city café in Toronto. “We have to take care of people. The fairness agenda, as I have talked about many times, is for me an integral part of our economic well-being.”
Source: Globe and Mail
Wynn, leader of the Ontario Liberal Party, threw down the gauntlet similar to President Obama. She is also hoping that this will be a winning issue among Ontarions.
Despite good intentions, some business praised the intention of tying the minimum wage as a good move, which will make wages more predictable. On the other hand some small business owners said that they could not afford it.
Liberals will claim that raising the minimum wage will actually help the economy by giving consumers more money to spend on the essential. Opponents claim that raising the minimum wage, which many of them consider an entrance level wage, will destroy jobs. The current minimum wage in the US is $7.95. Neither the current minimum wage nor the Ontario $11 minimum wage are a living wage for families.
Ontario’s new minimum wage will be the new mark to aim for around the country. Albera, one of Canada’s most prosperous provinces has a minimum wage of $9.95. While Qubebec and Ontario will watch developments closely in Ontario, they will tread cautiously before meeting the new benchmark. Premier Alison Redford has already been under some pressure to raise the minimum wage. Those calls will most certainly increase.
Ontario’s play is certain to be closely watched in Quebec and British Columbia, where labour and social justice groups have historically pressured government to keep wages high. B.C. Premier Christy Clark ended a decade-long freeze – and a fight with trade unions – by dramatically increasing her province’s minimum wage to match Ontario’s in 2012. Quebec, which faced frequent rate-raising protests in the late 2000s, is not far behind, at $10.15. Ms. Wynne’s hike will now put Ontario far ahead of both and give advocates of higher minimums there a fresh target to aim for.
Source: Globe and Mail
Needless to say costs are being piled on people in the way of rent, utility bills and cost of groceries. The new rate won’t help them meet ends. While some small business owners still require the amount of help to provide the necessary services, the bottom line will be affected. Some my employ more part time workers in favor of full time, while others may not survive. Restaurants may be able to raise their prices.
Hiking the minimum wage is a Catch 22. You’re damned if you do and damned if you don’t.