Ontario Minimum Wage Hike Is Costing Us Money (Freedom Minute)
In this video, I do another quick freedom minute report!
The Ontario minimum wage hike is not turning out like so many utopians hoped for.
Prices for food purchased at the province’s eateries rose 1.9 per cent in January from a month earlier, Statistics Canada reported.
The minimum wage hike perfectly defines the Hegelian Dialectic of problem, reaction, solution, repeat. Alongside the out of control printing of fiat currency rising the inflation rate, raising the minimum wage simply uniforms value at a higher price. So basically, you can raise it 20 dollars on top of today's minimum wage. You will simply make just as much value but with a higher number on your money.
This is difficult to explain to most, but what we are seeing is the propping up of major corporation by the hand of the state.
McDonalds can afford to pay a minimum wage, but small businesses for the most part cannot. They have to sacrifice production and capitalistic incentive to compete and innovate, etc.
Instead of looking to government to fix the problems of government, we as individuals should fix these problems by the hand of demand.
The majority of people advocated the wage increase here. All they saw was the short term gain of a few extra dollars in their hands. Can't really blame them though as more money is obviously appealing but If we take Seattle as an example the numbers don't lie. I've experienced price increases and staff shortages in my area already its an inevitability.
I have heard about the experience in Seattle a couple of times an I believe that people are commenting on a study conducted last year that did show that found:
However in this article it describes a paper which contradicts the first paper underscoring its limitations.
The second paper found that eliminated minimum wage jobs were replaced with better paying jobs.
You described what the expected outcome yourself:
Businesses respond to the increase cost of labour by increasing their prices. Because people now are earning more, they are buying more. Businesses respond to the increased demand for their products by hiring more people ... spurring staff shortages.
Minimum wage means higher prices, layoffs, fewer wage hours, failing businesses, less hiring, and higher cost of living in general.
If I could modify your comment a little bit, minimum wage "may" mean all those things. During the fifties, the unions were at their strongest but also people enjoyed the best standard of living. Over eighty percent of new businesses go bankrupt within the first two years. It might be that having a shock like an enforced wage increase just makes them fail sooner. Here is an example of a business which went the other direction:
http://lindsayadvocate.ca/st-daves-diner-finds-way-thrive-new-higher-minimum-wage/
This is a small business but it has superior management. In Canada minimum wage went from $11.60 to $14.00 per hour. I think that the cost of a meal at most restaurants increased by $1.00. From an employee's perspective they now need to spend $1.00 extra per meal but they received over $2.00 in return. What do minimum wage people do with an extra $1.00? More food, more clothes, maybe a little better apartment?
Minimum wage happens every once in a long while. The world has not ended yet.
The cities where minimum wage is instated go to shit. Just look at Seattle. Also, Canada seems to be going to shit. And why should other poor people have to pay more money for everything that they buy? It is only 1 dollar more at the restaurant, but when those price increases are accounted for across each and every bill, minimum wage workers are now behind, despite the wage increase. Furthermore, minimum wage instatement drives the instatement of automation forward. Businesses simply hire less, and existing employees have to then work harder to make up the labor.
Anything that strangles businesses or quashes opportunity like this is clearly not only irrational—but also cruel.
Yes things are going to "shit" but it has very little to do with minimum wage. Minimum wage jobs are not sufficient to propel a country. The problem in the US and Canada is that the majority of the industrial capacity has been shifted to China. My city which used to headquarter over 20 manufacturing companies before the nineties only has a couple of subsidiary plants left. Consider your own area. How many factories have closed. This has nothing to do with minimum wage.
As I reported in the post below this article contradicts the first report in Seattle. Yes minimum wage jobs were lost but they were replaced with better paying jobs.
The argument that higher wages drives companies to automation is very true. But historically there were new jobs and a better standard of living for the poor as a long term outcome. Even the poorest people in our society today have a better lifestyle than any class in the past.
This article contradicts that statement.
http://lindsayadvocate.ca/st-daves-diner-finds-way-thrive-new-higher-minimum-wage/
It is poorly managed businesses fire employees. Here is the reaction that Tim Horton's ... a coffee chain in Canada did.
While Tim Horton's over all is having slower same store sales compared to last year
https://www.bnn.ca/restaurant-brands-profit-soars-in-fourth-quarter-1.995903
its parent company is making more profits. One thing that this report doesn't mention is that Tim Horton's is getting head to head competition from McDonalds which is giving free coffee away. Any size for a buck:
https://www.redflagdeals.com/deal/coffee-desserts/mcdonalds-get-any-size-mccafe-premium-roast-coffee-for-100-until-march-4/
McDonald's is much bigger than Tim Hortons—evidence that success in lieu of minimum wage instatement is more due to size and capital than it is about effective management. Also, I agree that automation is a good thing and raises the quality of life for everyone. But strangling markets with regulations is not the right way to move our society forward with automation. Also, where I live, minimum wage was instated in 2017, set to go up each year until 2020. I lost my job as we went out of business in December. I have empirical evidence.
What was the nature of your job? Did your company increase prices on its products? If it was unique and filled a certain niche it would represent an opportunity to replace the business. Unfortunately many markets are saturated so it is difficult to raise prices. I used to sell computers when computers were $2000. At that price, my employee wages were 10 percent of the cost (including accounting staff) and the profit was roughly 20 percent. Then the production of computers shifted overseas and could be bought for $1000. It meant that I had to sell twice as many computers (and so did all my competitors) in order to pay for my employees. So originally there was room to increase the wage component ... there is little difference between $2000 and $2100 but there is a big difference between $1000 and $1100 when buying a computer psychologically. If you buy a house for $1,000,000 or 1,000,100 dollars it is almost no difference.
What my point is that with many businesses a change in their wages can cause them to fail but they are very marginal and unsafe and probably would fail anyway. After all had you ever asked for a raise?
Source
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Corporations profits have increased for decades while incomes have decreased. Increasing minimum wage addresses that imbalance.
I had asked for raises and gotten them—no minimum wage necessary. It was a restaurant and yes—it started with them raising prices and cutting hours. Also, when corporations profit, shareholders profit. But people like to pretend that income from wise investment is automatically evil and wrong.
Also, is that graph hourly wages, or yearly wages?
Wages (the red line) are as they are represented in the GDP. GDP is all the goods and services accounted for in an economy each year. So in 2000 49% of the GDP (value on the right side) declined to 44% in 2012. In contrast profits increased from 9% of the GDP to 12% in 2012.
During the period illustrated the GDP rose from roughly $10 Trillions dollars to $16 Trillion dollars.
I am sorry that you had to go through the distress of losing your job. I know that not only the employees but also the employers come under a lot of emotional pressure. That is a good thing about Steem that is represents an alternative stream of income which I hope will insulated you from that kind of event in the future.
I hope for your continued Steem success.
Thanks for sharing this video Good work keep it up Hope you will share more
Hey @ joshsigurdson
With respect I did post a rebuttal here.
https://steemit.com/life/@dwarrilow2002/ontario-minimum-wage-hike-is-costing-us-money-freedom-minute-a-rebuttal
People have to stop looking at these types of jobs as career jobs . These are just entry level jobs , and why would I pay you $15 an hour to flip me a burger when I can go get an entire package of about a dozen burger patties , buns and lettuce for that amount . It makes no economic sense , and if you want to be worth more then do more . And what I mean is that as a child the one thing I heard repeatedly from my parents and grandparents is get some skills so that you are worth more to your employer . And make yourself more valuable by being independent of that employer for example . People that are contractors always make more because they have to bring their own tools , and knowing how to use those tools makes you valuable were as in pushing a mop around when your not tending the cash register makes you easily replaceable . Another thing my family always told me is they can reposses your car , your home and your property , but they can’t reposses your brain 🧠 . So what ever you do in life learning any skill is better then being told what to do . Specially if it involves a mop , or trash container liners . Good video 👏👍✌️♥️👊🏻