Raising minimum wage a good, and bad, idea
June 8, 2017
Ontario did something both good and bad last week by announcing an increase to minimum wage.
The Liberal government announced plans for Ontario to be the second province to increase provincial minimum wage to $15 per hour, the first will be Alberta.
Ontario’s current minimum wage of $11.40 per hour will be increased to $14 an hour on January 1, 2018. The following January minimum wage would be increased to $15 per hour, and in the future will increase at the rate of inflation.
In my opinion, Premier Kathleen Wynne made a bold move that was overdue. For that I give her government my vote of confidence.
Unfortunately, the implementation of the proposed wage increase lacked in creativity and for that, it deserves a failing grade.
The battlefield on this issue was equally divided.
Those focusing on the needs of workers think the proposed wage increase is justified and necessary to allow workers to exist with the high cost of living.
On the other side are the voices representing many businesses saying higher labour costs will result in some jobs being eliminated, and potentially some businesses will fail or go out of business.
Those traditional responses could have easily been anticipated.
The entrepreneurial and capitalistic spirit of business is to create wealth for owners. Economically, one of the byproducts of that endeavor is to provide employment for the majority of workers who want a job, and not to own a business.
Social responsibility would dictate that both business owners and workers prosper.
The increase of minimum wage narrows the gap of income for those workers who are represented by unions and those who are not. That is fair.
In a perfect world, the government should provide enough worker benefits that would render the services of unions obsolete. That is not currently the case.
The wage increase is good for workers.
As it turns out, the wage increase is also good for the government. There are more voting citizens who receive a wage than own a business, so the political ramifications of increased wages should bode well for the liberal government in future elections.
The problem with the increase in minimum wage is it falls entirely on the business community. There were other options that could’ve been added to this initiative that would have provided a better and more balanced approach.
For example, businesses, and particularly small businesses, that employee the lion’s share of the workforce have become bogged down by bureaucratic regulatory processes pushed on them by the government.
The government should have made concessions to business to make a wage increase a win-win. One idea would be to streamline and simplify the regulatory pressures that most businesses complain about.
Another option would be to implement some sort of tax reduction to business owners.
The logic would be businesses have to be more efficient now that they have increased labour costs. A tax reduction would mean the provincial government would have to be more efficient because there would be less tax revenue coming in every year.
The increase in minimum wage is socially responsible. That was the easy part. As stated above the government gets full marks.
Pushing the entire obligation of increased wage onto businesses is unfair. Businesses deserve concessions and our provincial government should have provided some offsetting benefit to business owners.