Ontario - $10 Minimum Wage Proposal

[Keepitsimple]

The Toronto Star, backed up by the provincial NDP, and endorsed by Federal NDP leader Jack Layton have been pushing to increase Ontario's minimum wage from $8.00 to $10.00 as part of the Star's action on Poverty initiative. While in principal, such a move would seem to help those at the fringes of the labour force, there are problems that have not entered into discussion yet. Critics already point to the fact that many small business would not be able to pay the higher wage which would likely mean fewer jobs available at the minimum wage level. But the increase to $10 also works it's way up the line - as the dishwasher sees his wage increase to $10, what happens to his colleague who was already making $10 per hour, presumably at a job that was "worth" $2.00 more than the dishwasher. Using this analogy, one can see that there can be a cascading effect.

Another serious problem which has not yet surfaced is the attractiveness of a $10 minimum wage to out-of-province workers. Unless the entire country follows in some sort of lockstep, there will be an influx of "outside" workers to Ontario. The net result will be more workers competing for fewer jobs.

Minimum wages are a delicate balancing act between providing a wage that can provide some level of income and the ability of small businesses to survive. Superimposed on that are the variances between provinces that balance cost-of-living with keeping workers in their own province.

What are your thoughts on such an increase - especially as it relates to your own communities and business or personal situations?

[geoffrey]

Waste of time and effort. Raising the minimum wage creates unemployment, and Ontario has unemployment issues to begin with.

There is no economic benefit to raising the wage. Terrible choice to even have one.

[Slavik44]

I can't wait until one day the NDP realises that millions of Canadians are depressed and as a result introduce legislation that requires people to be happy.

Minimium wage is highly irrelavent, almost no one is actually paid minimium wage and if they are it is generally temporary untill they get a few months of work behind themselves. Besides that raising minimium wage to $10 an hour doesn't really affect poverty levels. The majority of people making money in the 8-12 range are high school and college students. At the most it might be stay at home mom's whose kids have goen off to school and they have decided to supplement their husbands income, so they have more spending cash.

We also have to ask where the money is comming from. Bussinesses do not neccessarily have a printing press in their basement. Large businesses might be able to take on the added cost. But what about smaller businesses? They might not be able to monetarily offer you as much money, but your boss is a hell of alot more understanding when you tell him you need to skip a day to study. I fear that we are simply pushing small businesses away through minimium wage legislation.

[madmax]

Minimium wage is highly irrelavent, almost no one is actually paid minimium wage and if they are it is generally temporary untill they get a few months of work behind themselves.

Yup, they could earn 5cents or 15 cents more. Even those working at 8.75cents or 9.15cents wouldn't benefit from a $10 minimum wage.

Besides that raising minimium wage to $10 an hour doesn't really affect poverty levels. The majority of people making money in the 8-12 range are high school and college students.

Really?

At the most it might be stay at home mom's whose kids have goen off to school and they have decided to supplement their husbands income, so they have more spending cash.

Ozzie and Harriet 2007

We also have to ask where the money is comming from. Bussinesses do not neccessarily have a printing press in their basement. Large businesses might be able to take on the added cost. But what about smaller businesses?

You accept that Large Business "could" take on the added costs. What is a "Large Business" ?

Smaller Business are not in the market to compete with wages of large competitors. They provide better quality and service to attract business from the Home Depots and Wallmarts. Thus there prices are nominally higher.

Like any other minimum wage hike, it is much ado about nothing.

There are lots of other factors that are going to crush business. Seeing Hydro Costs in manufacturing double and triple in 5 years has done more to harm large enterprises then a hike in minimum wage. So if 200,000 jobs are affected by this action, why is there no one screaming bloody murder about the loss of high paying jobs. This also has detrimental effect on the economy.

They might not be able to monetarily offer you as much money, but your boss is a hell of alot more understanding when you tell him you need to skip a day to study. I fear that we are simply pushing small businesses away through minimium wage legislation.

Small Business have always screamed at the cost of doing business, particularly with minimum wage. Then they raise their prices and life goes on. Their are other ways the government can address the costs to small business. Ways to make small business more attractive. Government has rarely been in tune with the needs of small business. Minimum wage is just one factor. It is not the deathnell. Nor will it be. The business will survive on its merits as an enterprise, not on whether pay is adjusted to afford an individual a living wage.

[madmax]

Waste of time and effort. Raising the minimum wage creates unemployment, and Ontario has unemployment issues to begin with.

There is no economic benefit to raising the wage. Terrible choice to even have one.

Your sounding like a Euro Socialist Again! Here are some countries without minimum wage.

Many countries, such as Norway, Sweden, Finland, Denmark, Switzerland, Germany, Austria, Italy, and Cyprus have no minimum wage laws, but rely on employer groups and trade unions to set minimum earnings through collective bargaining.[5]

So here are the other countries that have engaged in the "terrible" Choice.

More than 90% of all countries have some kind of minimum wage legislation.[1]

The first national minimum wage law was enacted by the government of New Zealand in 1896, followed by Australia in 1899 and United Kingdom in 1902. In the United States, statutory minimum wages were first introduced nationally in 1938,[2] and in the United Kingdom in 1999.[3] In the European Union, 18 out of 25 member states currently have national minimum wages.[4]

So here are some alternatives to minimum wage for 90% of the countries in the world.

[edit] Policy alternatives to the minimum wage

The primary purpose of the minimum wage is to give higher income to low wage earners, but the minimum wage isn't the only policy that attempts to accomplish this goal. Several policy alternatives such as a negative income tax or earned income tax credit give benefits to low wage workers in a method that many economists believe is more economically efficient.[7]

Under a classical analysis of a minimum wage, some low wage earners are helped by the higher minimum wage, some low wage earners lose their jobs because of the higher minimum wage, and businesses employing low wage earners face higher labor costs. A benefit is delivered to some low wage workers at the expense of other low wage workers and businesses employing low wage workers.

On the other hand, a negative income tax or earned income tax credit benefits a broader population of low wage earners, and society as a whole bears the cost. This is more economically efficient because, a low tax rate on the broader economy causes less deadweight loss than a high tax rate on a small section of the economy. The ability of the earned income tax credit to deliver a larger monetary benefit to poor workers at a lower cost to society was recently documented in a report by the Congressional Budget Office.[8]

I tend to fall into this category

Many economists on both the left and right believe that the earned income tax credit is a more efficient way of delivering benefits to the working poor than a minimum wage because the EITC doesn't increase unemployment and it only delivers benefits to poor workers, not all low wage workers

Or I am for a minimum wage based on collective bargaining, not legislation.

But until these style of changes are enacted, people can question the value of the minimum wage, but this is the system we have. And it is not out of line to debate an increase in the minimum wage and it's effects in the workplace and the marketplace.

Here is a good article on a strong market place competitor.

http://news.xinhuanet.com/english/2007-02/...ent_5723532.htm

"Desperation" best describes the situation that many migrant workers unfortunately find themselves in at this time of year, with their employers "forgetting" to pay them before the holiday.

Xiang had been painting walls at a construction site in the Daxing District of Beijing for half a year. "I need the money to support my two daughters' education," he said. "I would lose face if I went home empty-handed."

"Many of us are borrowing money for food and lodging," Xiang explained. "We can't afford to wait around nor can we afford a ticket home. The boss just paid us about 100 yuan (12.5 U.S. dollars) a month to cover our sustenance costs and promised to pay us when the project was finished."

Xiang, together with about 200 of his colleagues, had begged their employer for their one million yuan's worth of wages -- about 5,000 yuan each, but failed. As a result, they were bullied and harassed by a gang of hired thugs.

According to police and voluntary lawyers representing the migrant workers, their employer failed to pay them as the commissioned contractor that hired them is illegal and unqualified. Xiang and his colleagues now believe that it was a "trap" from the beginning.

"The boss knew the contractor was unqualified," Xiang said, "but he did it on purpose so that when the project was finished he need not pay us."

Out of sheer desperation, Xiang and his colleagues took extreme steps in order to arouse media and government attention, forming a blockade on a road in Daxing District. The publicity stunt paid off and the intensified pressure from the local government forced their employer to pay out.

Perhaps $600 dollars a year in China goes alot further than $400 and less in Toronto a week.

Can we afford to remove the minimum wage? Would this create more jobs, and drive up competition?

I am not convinced, and no other Western Countrie has done so without a counterbalance in negotiating the price of labour.

Would lowering the Minimum Wage in Nunavent from $8.75 create more jobs to that with Ontarios $8.00 create more jobs?

[Jerry J. Fortin]

Minimum wages don't hurt business! They simple pass on the cost to the consumers of the products and services they provide! So the end result is an employee making a few more dollars a week is that they spend more dollars within their local economies.

We need to consider where the real dollars are made in this nation. It is not a few multi-million dollar sales that bring in big profits but instead the millions upon millions of one dollar sales of all kinds of consumable products that yield immense profit. So providing for an increase in the disposable income of citizens is actually beneficial to the economy. If you take that a step or two further, look at the tax burden that drains disposable income from citizens and prevents them from purchasing products and services that create the wealth of the nation. The issue that truely needs to be addressed is devising a means to retain that earned profit within the nation. Our government should be working on ways to improve our internal economy and decrease the dependence on products and services that are i9mported from outside the nation.

In order to gain any reasonable measure of economic security we must first create and then develop internal markets for domestic products and services. Excessive productive capacity can be earmarked for export. This is a no brainer decision for economic policy. The question is why have we not followed this policy?

[Wilber]

Perhaps $600 dollars a year in China goes alot further than $400 and less in Toronto a week.

Higher wages allow people to buy more goods made in China. They drive the cost of Canadian produced goods and services up so that they are more expensive for anyone who doesn't benefit from the increased wage. Someone always pays and someone always benefits but it isn't always those who were intended to.

[madmax]

Perhaps $600 dollars a year in China goes alot further than $400 and less in Toronto a week.

Higher wages allow people to buy more goods made in China. They drive the cost of Canadian produced goods and services up so that they are more expensive for anyone who doesn't benefit from the increased wage. Someone always pays and someone always benefits but it isn't always those who were intended to.

Are you suggesting that a lower minimum wage would decrease imports from China?

Are you suggesting that All Canadians start taking immediate wage decreases to compete against China?

Clearly those people whom hire Minimum Wage Workers, would be one of the largest purchasers of consumer goods made in China because they have a Larger disposable income.

I don't see any factors mentioned, that state that Canada is on a level playing field with China. I don't believe that driving others into poverty is a successful way to compete against imported goods.

I don't believe the $10 is going to do anything with regards to creating a market shift towards imported goods.

Do the math in various manufacturing and you might discover that Labour Costs could be erradicated to Zero in Ontario and the cost of doing business is still significantly higher then doing the same business in China and shipping it over.

There are people whom run CNC machines here for $10. The finished goods from China cost less then the raw materials either purchased or imported. That is very difficult to compete against. OF course there are people whom operate CNC for significantly more money was well, and what may make the difference in their employment is the need for the product and delivery time frames. "Just in Time" has that effect.

But Whether they are working for $8 $10 or $24, it isn't going to make a hill of beans difference to imported goods from China.

If people need $10 an hour to live, then the minimum wage should be addressed. If we are going to create a national plan to compete in the global market, I am all ears. Otherwise, open up the warehouses and pay the people in them until that occurs.

[madmax]

In order to gain any reasonable measure of economic security we must first create and then develop internal markets for domestic products and services. Excessive productive capacity can be earmarked for export. This is a no brainer decision for economic policy. The question is why have we not followed this policy?

Hmm, Ever heard of Sir John A MacDonald and the National Policy? We have done just that in the past but Tariff Walls to create an internal market for domestic Products were eliminated in the Late 80s and early 90s with the FTA and then the globalized market has made it more attractive to invest in India and China. Banks do this as well with your accounts. (feel comfortable).

But even with Free Trade and Fair competition (which just doesn't exist), Manufacturing is affected by Higher Hydro Rates/natural gas increases.In the 90s we had an excess of Hydro in Ontario. Hydro was affordable, and the costs were steady, which is what is required in the heavy consumption industries. The Dollar can cause tremendous pressures on profits. A small rise in the dollar and a re evalution by the purchaser can erase profits overnight and cause a deficit in operations.

Diefenbaker once tied the dollar to the US dollar. It is our largest, and only significant trading partner. With the US dollar TANKING, ours is artificially higher then the market should dictate, regardless of the prosperity in Alberta/Sask oil sectors.

China has an artificially low yuan which is fixed, and they will not float it.

The US circles the wagons, once they realized they are getting hammered in trade, some governments more then others. I recall Ronald Reagan tariffing everything in Sight, to beat back the Japanese imports.

Motorcycles where priced excessively high from Japan, and Harley Davidson rose from the Ashes of imcompetence, to become a force in the industry again.

We used to have a Auto Pact with "Canadian Content" written into the agreement. Today with NAFTA that was watered down to "North American" content which included Mexico.

I do not see an immediate solution on the horizon, while I agree with you on many points, the difference today is the scope and movement in the Global Economy. Ideas that worked in the past, are less likely when the economy is so open to foreign elements and investments.

I do know that there is a problem, when Factories are taking the profits along with the intellectual property and investing this money and knowledge in China, to export the same goods here.

These are North American Companies, using Capital as it is to be used. To take the money and invest it in the area of the best return.

As a Nation or a worker whom is limited in movement in the global economy, it kinda sucks.

So, when are you running for Election?

[jdobbin]

So here are the other countries that have engaged in the "terrible" Choice.

I tend to fall into this category

Many economists on both the left and right believe that the earned income tax credit is a more efficient way of delivering benefits to the working poor than a minimum wage because the EITC doesn't increase unemployment and it only delivers benefits to poor workers, not all low wage workers

Good summary, Max. Where did it come from?

I fall into the income tax credit as well.

However, as you said, since we fall into the minimum wage category already, it is worth visiting that subject until we have an income tax regimen that truly delivers to poor workers.

[Riverwind]

Small Business have always screamed at the cost of doing business, particularly with minimum wage. Then they raise their prices and life goes on.

Most small businesses operate in an extremely competitive environment and do not have the luxury of simply 'raising their prices'. Even if the business does not compete with offshore providers they still will lose customers because higher prices means less demand. If it was so simple then why not make the minimum wage $30/hour? It should not be a problem since businesses can just 'raise their prices'. If you agree that $30 is excessive then what facts do have that demonstrate that increasing the minimum wage to $10 is not excessive?

More importantly, increasing the minimum wage increases the cost of living in a society which will effectively cancel out many of the benefits that a minimum wage hike is supposed to deliver to low income people. Even worse, raising the cost of living makes businesses which do compete with labour in china and elsewhere less competitive even if they do not employ minimum wage workers. Engineers, radiologists and business anaylsts in India can work for cheap because businesses in India that provide basic services like retail stores pay wages that are a small fraction of what they are here. That means the cost of living there is much lower which means they don't have to pay skilled people as much. We cannot afford to ignore that reality if we want to have an economy that does something more than dig up rocks and cut down trees.

I am not saying that we should lower the minimum wage at this time, however, the days when gov'ts could safely buy a few votes by bumping up the minimum wage are gone - global competition is real and cannot be ignored. If people working for minimum wage want to be paid more then it should because they are more productive - not because some gov't waved its magic wand.

[Wilber]

Are you suggesting that a lower minimum wage would decrease imports from China?

I am suggesting that a higher wages would increase the cost of anything produced in Canada but would not effect the cost of imports, making their products even more competitive and ours less. The cost will be born by Canadians not the Chinese. It might be worth considering which Canadians will be effected most before jumping into something like this. Should all those on fixed incomes get a similar increase? If not they will be the ones who suffer most from increased costs, not the affluent.

There are people whom run CNC machines here for $10. The finished goods from China cost less then the raw materials either purchased or imported. That is very difficult to compete against. OF course there are people whom operate CNC for significantly more money was well, and what may make the difference in their employment is the need for the product and delivery time frames. "Just in Time" has that effect.

But Whether they are working for $8 $10 or $24, it isn't going to make a hill of beans difference to imported goods from China.

These companies where people run CNC machines for $10, who do they sell to? Would they still be competitive if they had to pay $24? I think it could make a rather large pile of beans to many companies. Would many even stay in Canada if they had to do that or move offshore?

[Jerry J. Fortin]

Gee folks, it seems that a lot of posts indicate a great reluctance to see the wage slaves get a break. Lets look at some simple facts. For starters there are a hell of a lot of people in this country who are not by their own definition affluent. Second of all this is a democracy. So what makes you folks think that the majority of citizens would not best be served by an increase in their disposable income?

Can any nation on earth compete with China's less than $2.00 an hour factory wages? Where are corporations investing in manufacturing plants.....hmmm lets see... China! So those companies who used to employ our citizens are gravitating to less expensive labour markets to produce goods to import into our nations. In the corporate mindset bean counters rule. Do you think for a second that your employer wouldn't leap at the chance to reduce your wages by 20%, well guess what.... they can hire 10 Chinese to work for everyone of us! How long do you think it will take to get rid of us? Just as fast as the corporation can afford to invest in those labour markets is the answer.

Just think about it people. Greed and the quest for profit has a far higher profile in business than the mere concerns of employees. So what do we do? We can't turn back the clock and put the genie back in the bottle so we need a solution that comes from out of the regular box. We need to take a few steps back from the cliff and notice the horizon. There are definite lines that cannot be crossed or confused. When the effects of business and commerce directly and adversely impact the needs of the citizens the government must e compelled to act on behalf of the people, they simply have no choice. The point of no return is rapidly approaching. Corporate governance is making vast inroads within our political system and we need to be aware of the consequences of this type of action.

I do not advocate a communistic approach, or even a radical socialistic approach. I do advocate monetary reforms and tax reforms. The ultimate goal of government being to improve the human condition directs policy toward systems that benefit the citizen. So governmental reforms must be inserted into the equation in order to eliminate corruption and waste.

The Robin Hood means of wealth transfer in Canada, namely the "Equalization Formulas" do little to actually prevent the economic pressures of the global marketplace on citizens. In fact the program actually rewards incompetence and penalizes productivity. Given this basic tenant of Canadian internal politics we are hard pressed to address the concerns of citizens with respect to emerging economies of immense scale. We are not even capable of directing our own economy to our own benefit! What Canada needs is a fundamental change in economic policy and reforms in our monetary system.

[Slavik44]

Yup, they could earn 5cents or 15 cents more. Even those working at 8.75cents or 9.15cents wouldn't benefit from a $10 minimum wage.

Woahhh...hold on a second, you mean to tell me that there are people earning more than minimium wage in Ontario??? How can that be? I mean are these companies stupid, don't they know that they are only legally required to pay people $8 an hour? Why would they pay more than that? You can't honestly expect me to believe that people can get a raise with out the government forcing companies to give them one.

Really?

Really

Ozzie and Harriet 2007

new rule of thumb, if the show is more than 40 years old, its time to find a new show.

You accept that Large Business "could" take on the added costs. What is a "Large Business" ?

"Might"

Smaller Business are not in the market to compete with wages of large competitors. They provide better quality and service to attract business from the Home Depots and Wallmarts. Thus there prices are nominally higher.

How high can they go? They still have to compete with each other, and remain somewhat competetive with the big bussineses.

Like any other minimum wage hike, it is much ado about nothing.

And here you were trying to tell me minimium wage would do something, now nothing

There are lots of other factors that are going to crush business. Seeing Hydro Costs in manufacturing double and triple in 5 years has done more to harm large enterprises then a hike in minimum wage. So if 200,000 jobs are affected by this action, why is there no one screaming bloody murder about the loss of high paying jobs. This also has detrimental effect on the economy.

I think I should take notes on this, incase I ever have to take a logic and reasoning class.

If I imply Y effects X, than I must also be implying Z cannot be effecting X

But I am glad you have re-stated your previous position, to implicity stating that minimium wage is also causing harm to Bussinesses just not as much as something else.

Small Business have always screamed at the cost of doing business, particularly with minimum wage. Then they raise their prices and life goes on.

Or they close their doors, fire some workers, don't hire more workers, raise prices, or a combination of the above. Either way the cost is transferred around and has the potential to harm more than just the small bussiness.

Their are other ways the government can address the costs to small business. Ways to make small business more attractive.

This brings us back to the whole X,Y,Z thing

Government has rarely been in tune with the needs of small business.

I won't argue with that

Minimum wage is just one factor.

Won't argue with that either, as long as we acknowledge it is a factor

It is not the deathnell. Nor will it be.

It could always be the straw that broke the camels back. We live in a world that has been shaped by slow ongoing processes over millions of years, even small little things can have a resulting impact and can cause troubles. We could poke a small hole in your gas tank. You might not run out of gas immediatley, but you will run out sooner.

[Big Blue Machine]

Question:

Do you think minimum wage would rise if the mandatory one was abolished?

[geoffrey]

Question:

Do you think minimum wage would rise if the mandatory one was abolished?

No, but the much more important employment might.

Though I'm not convinced in this lazy country we call Canada. We have a labour shortage in at least one area (Alberta, maybe BC) while the Maritimes have Eastern Bloc style unemployment.

So really, why bother making more jobs, no one will get off welfare to work them.

Welfare is too generous. Removing minimum wage legislation would also have to come with a serious scaling back of welfare, enough for a room, heat and hydro and a loaf of bread a week, butter every 2 weeks. If you can have a car, cable... while on welfare, why the hell would you bother working?

[madmax]

..... while the Maritimes have Eastern Bloc style unemployment.

Welfare is too generous.

Single employable person:

N.B. - $3,427 /year

If this isn't enough incentive to get a job in New Brunswick or rush off maybe hitchhike to Alberta, I don't know what is.

[geoffrey]

Single employable person:

N.B. - $3,427 /year

If this isn't enough incentive to get a job in New Brunswick or rush off maybe hitchhike to Alberta, I don't know what is.

Where did you get that number? If it's true, then great, N.B. is on it's way.

The other problem in the East is fishermen working a couple months then riding EI for the rest of the year. It's not welfare, but it stinks. Perhaps like all insurance, your premiums should go up the more you file claims?

[madmax]

Where did you get that number? If it's true, then great, N.B. is on it's way.

You can find that figure on stats canada, gnb.ca , cbc news, globe and mail, etc.. and it has been the case since 1998 IIRC. I believe in 2003 they had a increase which brings it up to the current figure.

[madmax]

Good summary, Max. Where did it come from?

How should I know?

I am not an economist.

I Race Motorcycles

[madmax]

. If it was so simple then why not make the minimum wage $30/hour? It should not be a problem since businesses can just 'raise their prices'. If you agree that $30 is excessive then what facts do have that demonstrate that increasing the minimum wage to $10 is not excessive?

Minimum Wage is used to determine a minimum living wage. It isn't there to determine whether or not an employer can pay. Many employers could pay a wage below minimum wage, but that would be lower than an established living wage. We have had this system before, it didn't work out so well.

$30 would be proven to be far and above a living wage.

More importantly, increasing the minimum wage increases the cost of living in a society which will effectively cancel out many of the benefits that a minimum wage hike is supposed to deliver to low income people.

That is an incorrect statement. Minimum Wage hike income is income that will be spent in the local economy. The cost of living will increase, regardless of whether the minimum wage remains stagnat or not.

Even worse, raising the cost of living makes businesses which do compete with labour in china and elsewhere less competitive even if they do not employ minimum wage workers. Engineers, radiologists and business anaylsts in India can work for cheap because businesses in India that provide basic services like retail stores pay wages that are a small fraction of what they are here.

Are you suggesting that the key to the global economy is for ENGINEERS, RADIOLOGISTS, BUSINESS ANALYSTS work for the minimum wage to compete with Low wages in India?

You are comparing Indias Infrastructure to Canadas. Not Retail Stores that pay fractions of the costs. They have child labour too. How far do you wish to lower the bar?

That means the cost of living there is much lower which means they don't have to pay skilled people as much. We cannot afford to ignore that reality if we want to have an economy that does something more than dig up rocks and cut down trees.

Riverwind, we are comparing a 3rd World Country to a 1st World country. The main problem I have right now is we are exporting our trees without employing our labour. This is a NO NO with regards to natural resources and is a failure of government. Don't employ Canadians, don't take Canadian Resources.

I am not saying that we should lower the minimum wage at this time, however, the days when gov'ts could safely buy a few votes by bumping up the minimum wage are gone - global competition is real and cannot be ignored. If people working for minimum wage want to be paid more then it should because they are more productive - not because some gov't waved its magic wand.

You are saying we should Lower the minimum wage. You just aren't admitting it to yourself. Competiting with wages in the pennies in 3rd world countries has just this effect.

Wages are not determined by productivity. (Insert Debate Here)

Wages are effected by labour shortages or surpluses.

Labour Shortages will drive Wages Up regardless of minimum wages.

Labour Surplus would drive Wages far below the minimum wage.

The 3rd World has a Labour Surplus. And now they are receiving the technology courtesy of General Electric, GM , Ford, Nissan, etc. Just like Mexico Did 15 years ago.

[jdobbin]

Good summary, Max. Where did it come from?

How should I know?

I am not an economist.

I Race Motorcycles

I was referring to the link. I could see footnotes and all in it.

[Riverwind]

That is an incorrect statement. Minimum Wage hike income is income that will be spent in the local economy. The cost of living will increase, regardless of whether the minimum wage remains stagnant or not.

If employers are forced to hike prices because higher wages then the cost of living goes up. That is basic math. If prices do _not_ go up it is because employers have reduced the number of people that they employ.

Are you suggesting that the key to the global economy is for ENGINEERS, RADIOLOGISTS, BUSINESS ANALYSTS work for the minimum wage to compete with Low wages in India?

The wages for high skilled people are already facing downward pressure from international competition. Why should people facing wages cuts be expected to pay more so people in jobs protected from international competition can get paid more?

You are comparing Indias Infrastructure to Canadas. Not Retail Stores that pay fractions of the costs. They have child labour too. How far do you wish to lower the bar?

We have no choice. Globalization is a reality that is no longer confined to a narrow section of job categories.

You Wages are effected by labour shortages or surpluses.

There is a global surplus of labour and the majority of people in rich countries have nothing to look forward except declining standards of living. Artificially increasing the minimum wage will simply accelerate this process because it undermines the only industries that have any chance of competing in this environment.

[madmax]

I was referring to the link. I could see footnotes and all in it.

Yes, I know what you were asking, I just had to have some fun with it. I believe I yanked that all off wikipedia.

[madmax]

If employers are forced to hike prices because higher wages then the cost of living goes up. That is basic math. If prices do _not_ go up it is because employers have reduced the number of people that they employ.

The latter would suggest that the cost of living will not go up. I am not arguing employment levels.

With regards to the former:

Raising the minimum wage to meet basic living standards will not increase the cost of living. The number of people on minimum wage is a small portion of working society. The minimum wage has been raised many times to catch up to the cost of living, not visa versa.

The wages for high skilled people are already facing downward pressure from international competition. Why should people facing wages cuts be expected to pay more so people in jobs protected from international competition can get paid more.

Are you suggesting that Canadian Bankers and Politicians should take pay cuts? Politicians, Liberal and Conservative just voted themselves a 31% pay increase. Bankers are protected from foreign markets unlike the labour forces they employ.

Do I recognise downward pressure on wages from reduced tariffs. Of course I do. Are the gains from lower prices enough to sustain a strong middle class in Canada?

Why have no choice. Globalization is a reality that is no longer confined to a narrow section of job categories.

First of all, I will never condone Child Labour, and the fact that you suggest "We have no choice" would suggest a disconnect between government involvement in trade and a free economy. I do not think it is correct for Chocolate factory workers in Canada to be competeting against 8 year olds in Nigeria.

2nd of all, if these cheap consumer goods are coming into the country, then the only benefit of distribution of these goods is in achieving a livable wage.

Again, I have mentioned another means of doing so, but we will follow the thread as the current minimum wage.

There is a global surplus of labour and the majority of people in rich countries have nothing to look forward except declining standards of living. Artificially increasing the minimum wage will simply accelerate this process because it undermines the only industries that have any chance of competing in this environment.

I have been heavily involved in manufacturing for far to long. The wages, be it $8, $10, $18 are only a small portion of the costs of production. You go after the easy costs firsts.

Pension Relief, Benefit Relief, Wages and Downsizing are the easiest to address, and easiest to wack the employee with. Do it or we go under....

But when you are faced with manufacturing costs that are significantly out of control, such as Raw Materials, Hydro, Gas, and these are 70% of your costs and are doubling and tripling, your 5 % to 7% wages and reductions of 20% off these costs may only guarrantee a limited survival in terms of months, particularly when being forced to address competitive biddding offshore. You have pressure on all fronts, and the end result is closure before bankruptcy, or try to make a go of it and find out what CCAA is all about.

Ontario doesn't compete in industry off of the minimum wage. These jobs have always been the easiest to replace and the most threatened throughout Ontarios Long Industrial History. Only the means to move this business has determined the longevity of a minimum wage job, not how low that wage is.

Industry in Ontario has been very skilled, very technical and complex. These Industries have been the survivors since the growth of NAFTA and the original removal of industrial tariffs on goods and resources.

Today, however, the industrial climate in Ontarios is in terrible shape with a government that has little understanding of what it is about to face. This will have little to do with a minimum wage, and really any downward pressure on wages is only buying time for the short term unless other factors are corrected.

Capital is very fluid. If I am a foreign investor, I am not going to keep my money in industry in Ontario. You could have a minimum wage of $2 and it wouldn't make a hill of beans difference in many instances. This capital will go to China, with a fixed Yuan, lower standards, growing technical workforce, and increasing technological investment in supporting areas.

This creates a full package.

Low wage labour for low wage jobs in Ontario, isn't an option when competeting or retaining investment dollars in major manufacturing.

What you are suggesting will not occur regardless of the original logic you have put before the argument.

But what you are also suggesting is that minimum wage jobs in industry, if reduced say 20% may survive, in a global market, until the next reduction of 20% is asked for, and so on.

But Hydro Costs, are going up, Gas costs are going up, and Raw materials that we compete against China for are not only going up in price but Canada is handing these resources over with little scrutiny. And into this the great gains the Canadian Dollar has made against our Largest, and realistically only trading partner

(Home depot does more business with Canada then France) is a recipe for the disengagement of industry in Ontario.

One thing that the Federal Government is correct upon. China needs our Resources to compete for our markets. Perhaps they should support human rights, remove child labour, float their dollar, or we should start whacking huge tariffs upon them. Of course, that would increase the price of consumer goods, far greater then the minimum wage could ever do under the argument that you suggest it should.