My 5 Cents On Minimum Wage Increases

Here in Ontario Canada, our Provincial Government has in its wisdom, raised the minimum wage to $14.00 per hour as of January 1, 2018. This move resulted in a significant increase for minimum wage earners from the earlier $11.60 per hour they were earning. Come January 1, 2019, the minimum wage will rise to $15.00 per hour.

Now here’s a comparative of these numbers, (the 140 hours by the way is calculated on a 7 hour day x 5 days per week x 4 weeks per month)

$11.60 p/hr x 140 hours = $1,624 month x 12 months = $19,488 per year.

$14.00 p/hr x 140 hours = $1,960 month x 12 months = $23,520 per year.

$15.00 p/hr x 140 hours = $2,100 month x 12 months =$25,200 per year.

Now you have to truly be a recipient of the minimum wage to feel the impact of these increases on your overall quality of life. There are other voices to be heard from on this issue – such as the business owners paying these wages, the Provincial Government officials about what they intended to bring about as they enacted this legislative change, the general populace in Ontario whose votes put this government in place, and yes even those with no income beyond social services. There are no shortages of opinion to be gathered on this issue.

Well, certainly I believe anyone and everyone would agree that earning $19,488 per year is not as satisfactory as receiving $23,520 per year. After all, that’s another $4,032 to spend as one chooses. That breaks down to $336 more a month if you’re keeping track of such things, or $84 per week. With an extra $84.00 per week, that’s healthier food in your shopping cart, a little extra set aside in the bank account for something you might not have been able to afford down the road, or perhaps at $336.00 per month, a nicer apartment unit in a better part of town. In short, life is better.

However, (yes here comes the bit that you’ve been waiting for and hoping you’d read), this isn’t the whole story. First of all, my numbers for illustrative purposes are based on 140 hours a month; in other words full-time. How many minimum wage earners are there out there getting full-time hours versus minimum wage earners getting part-time hours? For every hour you deduct from the above equations at the head of this article, there is a corresponding drop in income. If you are only getting 25 hours a week, that $14.00 per hour means you’re bringing in $350 a week, up from $290; an extra $60 a week. Still, a raise is a raise and when you don’t make much, every bit helps right?

Ah, but then we’ve got other things to factor in here. You don’t suppose that their buying power has increased with everything they buy remaining at previous levels do you? Oh naïve little you! Unfortunately for many low-income earners, their expenses have dramatically increased, and are about to jump more as well. Being low-income earners, most are renters vs. home or condo owners, so they are subject to paying monthly rent. Not surprisingly, many renters are telling me that their rents suddenly went up on January 1st of this year, and some others tell me they’ve recently come home to find notice of rent increases stuck under their doors for, ‘building improvements’. Legitimate or not, the timing is something to note.

Now, I noticed something of interest myself. This past week my wife and I had dinner out at Boston Pizza and noted they’d done over the restaurant, and the menus were updated too. We were impressed with the improvement in tables and chairs and couldn’t help but notice the price of their standard food items have increased too. Just under $50 for two adults to order an entrée each including a juice and a soft drink; no alcohol, no dessert, no appetizer, no tip factored in. How many times are people going to opt out for dinner? That might have explained the extra parking available when we arrived. Gone I suppose were the 10 items for $10 they once had just last year. Sigh…

Groceries, rent, transportation, clothing, recreation, property maintenance fees, contractors, manufacturers, goods and services; it’s all going up. One would be very naïve indeed to assume prices don’t rise in general due to inflation, but the minimum wage increase is also being used by some employers to justify increases.

Interestingly, I see at Boston Pizza they are hiring a Front of House Manager. This position has quite the number of additional requirements and expectations over the minimum wage servers and kitchen staff. The wage advertised for this Management position? $17.00 per hour. Break down that $2.00 hourly disparity between this position and minimum wage earning staff there and one might wonder why someone would bother to take on the additional responsibilities. Still, you get to put a title on your résumé and an identifying badge on your shirt that advertises your status.

It remains to be seen if this move wins the Liberal government in power another term as we’re in a voting year. Any incoming government if there is a change, would be hard-pressed to repeal such increases even if they wanted to and come out looking good.

We have to realize that every deserves a living wage; one that provides enough to lead life with dignity. Not everyone has the skills, aptitude and ability to advance and move from minimum wage jobs to middle-income and middle class; nor do all want to. It’s finding the balance that is the challenge.

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