The Minimum Wage Panel that has been touring Ontario is to report its recommendations shortly. There is a movement to raise the Minimum wage by close to 40% to $14/hour from the current $10.25/hour.
Early December I was pleased to take part in the ACORN Ottawa forum on the topic of raising the Minimum Wage. I was joined by representatives of the Green, Ontario New Democratic, Communist and People with Special Needs Political Parties. It was a good 2.5 hours of discussion and debate with a good sized audience from the area. Labour Minister and Ottawa Centre MPP Liberal Yasir Naqvi did not appear. I do not expect he will have anything to say on this until the recommendations are released.
A minimum wage increase is needed, but is a $4 increase in the cards? No – that size of increase will do more harm than help Ontario. The province cannot afford the increase – nor can the Small and Medium sized businesses here.
Who pays for increase? The employees, the business owners and consumers will pay. How do they pay?
Employees at Minimum Wage are not the only employees affected. Going to $14/hour means those working at above Minimum Wage and below $14 will also (or should) see an increase in wages.
Owners will see an increase in overhead expenses. To pay for these increased wages, employees may have scheduled work hours reduced – meaning the increase in hourly rate will be negated by reduced work hours. Business owners may spend more hours in the shop, covering the hours that were cut.
Consumers pay as some or all of the cost of increased wages will go to the consumer to pick up. How far can the consumer be stretched before they stop spending and start to look after themselves and keep the cash at home?
It is an economic domino effect; the end is not a nice show or a nice design.
So just what is the answer? Here are a few ideas and thoughts to ponder.
- An indexed Minimum Wage. While most workers receive a Cost of Living Allowance increase (COLA), the minimum wage is not subject to these indexed increases. Ontario should follow Nova Scotia and the Yukon and tie Minimum Wage to the rate of inflation. I support this move as does the Ontario Chamber of Commerce to ensure there is predictability for businesses.
- The Ontario PC Party White Paper “Welfare to Work” has strong initiatives to get people out of the minimum wage bubble.
- Stop the Claw Back and allow OW/ODSP recipients keep more of their earning
- Accelerate Job Placement for OW/ODSP recipients
- Work to make private sector rental housing more available to those in need
- Establish a Pathway to Employment Plan for OW/ODSP recipients
- Unions should recognize their part in the process. I DO NOT begrudge the wage increases won in contract negotiations or arbitration. As a former unionized worker and representative I know these workers are good tax paying citizens – but these increases play a part in the cost of everything. From goods, services and taxation – these increases play a part in the widening of the wage gap and the gap of affordability. It was good to see PSAC and the Ottawa and District Labour Council at the ACORN debate to defend the need of Minimum Wage Workers – but would they ever advise their workers to accept a freeze so their low wage counterparts can close the gap on the highest paid?
- Create an environment in Ontario to bring back ‘better than minimum wage’ jobs. Last week I wrote on Tim Hudak’s ‘One Million Jobs Plan’, the five steps in this plan are needed to bring business and manufacturing back to Ontario and give Ontarians access to better than $14/hour jobs.
So now we wait…for not only the panel recommendations but also the response of the Ontario government. Do we need to raise the Minimum Wage? Yes we do. But how much and how it is done will be critical to everyone in Ontario. We need to do this right and not all at once.
If you believe this is what we need to do, please support me in Ottawa Centre and Tim Hudak in Ontario by donating at www.robertdekker.ca. Only through an Ontario PC/Tim Hudak government can we make the turn and help everyone in Ontario. You can see more on the Million Jobs Act at www.ontariopc.com.