Sunday January 07, 2018
Is a higher minimum wage the best way to help low-income workers?
Sunday on Cross Country Checkup: Minimum wage
More from this episode:
- 'I would barely be able to make rent': Worker lives with parents to make ends meet
- 'I find it impossible to keep somebody around for that wage': Subcontractor fears hike will bring competition
How to help people at the bottom of the pay scale, who work hard for a living, but don't make enough to pay their bills? The solution seems simple enough—raise the minimum wage. Well, that's what has been happening regularly and slowly in most provinces for decades, but it still hasn't resulted in what people would call a living wage.
Recently, Alberta and then Ontario decided to take a bolder step and raise their minimums dramatically to $15 an hour phased in over a couple of years. Many cheered, saying it's about time that the lowest paid workers get the support they desperately need.
Ontario's latest hike from $11.60 to $14 took effect this past week. It's the largest increase in recent Canadian history. But it hasn't taken long for some unintended consequences to start appearing. Businesses tried to find ways to compensate for the large jump in their wage costs. Some Tim Hortons franchises opted to cut paid breaks and benefits for their employees. Other businesses looked at scaling back on the number of employees and in some cases, the amount of work they would do. Ontario Premier Kathleen Wynne came out fighting, saying rich business owners were acting like bullies. But many of those small business owners, some of them mom-and-pop operations, say the large increase in costs leaves them no alternative, but to cut back somewhere.
Alberta's next jump from $13.60 to $15 is scheduled for this coming October.
Economists are divided on the issue, with some saying there are better ways to help low-income workers—a guaranteed annual income or through a more carefully designed tax structure for small businesses. Others say a higher minimum wage is the simplest way to quickly put money in the pockets of those who need it most and the overall economy will benefit too, when those people spend that extra money...as they surely will.
Our question: "Is a higher minimum wage the best way to help low income workers?"
Corinne Pohlmann, senior vice-president of national affairs, Canadian Federation of Independent Business.
Trevor Tombe, Associate professor of Economics at the University of Calgary.
Kevin Howe, farmer in Aylmer, Ontario
Kaylie Tiessen, economist and policy analyst working in the research department at Unifor, Canada's largest private sector union, and research associate The Canadian Centre for Policy Alternatives
- Multiple Tim Hortons franchises, other businesses cut pay, benefits, citing minimum wage hike
- Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say
- Ontario premier calls Tim Hortons heir 'a bully' over wage actions
- Small businesses try to support staff amid minimum wage hike
- Tim Hortons lashes out at 'rogue' franchisees as employees lose even more perks
- Minimum wage hikes could cost Canada's economy 60,000 jobs by 2019
- Of course businesses would act like businesses in wake of minimum wage hikes: Robyn Urback
- VIDEO: Minimum wage goes up - Olivia Stefanovich reports
- VIDEO: Minimum wage fallout - Jacqueline Hansen reports
- No shortage of low-wage work in expensive cities, but it's bad for the economy: Don Pittis
- Does raising the minimum wage kill jobs? Decades-long U.S. study suggests no
- Calgary economist calls minimum wage hike 'modest change' affecting few workers (Jun. 30, 2016)
- In a fight over minimum wage at Tim Hortons, the worker loses
- Tim Hortons franchises owned by co-founders' children cut benefits, paid breaks
- Why a $15 minimum wage is good for business, by Armine Yalnizyan
- Making sense of a $15 minimum wage in Alberta
Globe and Mail
- Minimum-wage hike spurs Ontario businesses to cut benefits, hours
- Ontario restaurants consider business changes in wake of minimum-wage increase
- Ontario small-business owners raising prices to cover minimum wage hike
- Wynne's Tim Hortons comment is a double-double of dishonesty: Ted Mallet, CFIB
- Why a guaranteed minimum income is a better option than raising the minimum wage, by Andrew Coyne
- Tim Hortons franchises owned by children of founders reduce employee benefits to offset minimum wage hike
- Ontario businesses raise prices, consider cutting staff over minimum wage hike
- Ottawa restaurant Black Tomato to close after 23 years, citing minimum wage hike
- Evidence shows immigrants will get fewer jobs as Ontario ratchets up minimum wage to $15
Bank of Canada