2018 Ontario Provincial Election Discussion

[SunriseChampion]

Nah, Jasmine18, the middle class won't pay for it because the lowest income people tend to spend the most of their income as a percentage of disposable income. Rather than investing and saving, for example.
So, actually, this wage increase should lead to higher demand which in turn should help the middle class (the few of us left) by increasing economic activity thus helping middle wage jobs be created. Failing that t should at least drive up inflation which should, hopefully, be lead by middle wage increases. I already got mine....it wasn't quite 21% but it was more than double inflation which puts me ahead rather than just even with increased costs.

Moreover, my job won't even be directly affected by increased economic demand on the lower end of the income spectrum because my business relies directly on the economic activity of high wage (or high net-worth....half of them don't work, believe me) people. However, I fully expect that increased spending by the lowest wage earners will eventually result in more work for me (yay, he said sarcastically) and in more lucrative work (yay, he said sincerely).

 

[BurlOak]

Not the same thing. A price increase is a valid tool for any business to use to cope with cost increases without making it look like greed on steroids. Which is what I was saying all along.
I'm not eating crow, rather duck liver pâté and damn is it good.

Price increase is a tool that may or may not drive away business.
The fair and compassionate thing to do in the face of a 30% increase in business costs is to spread the pain around and reduce hours, benefits, breaks, etc. by a small amount to avoid layoffs. That is the same thing the NDP did during the Rae Days.

 

[BurlOak]

Cheers for posting that, Northern Light.

Wage costs as as a percentage of total input costs vary immensely between different fields. Mine, for example, is ~65% of total cost. So if my wage went up by 21%, (I wouldn't know what to do with that much) and then again the following year, my employer would have to raise prices by a lot more than a Tim's might have to.

One thing I'm not sure has been mentioned is the fact that the wage itself isn't the total employment cost for the employer. You have to add EI, CPP, WSIB payments for each employee. A 15$ hourly wage actually costs the employer at least 16.5$ an hour.

I thought 30% is a common value for employee overhead.

 

[SunriseChampion]

Price increase is a tool that may or may not drive away business.
The fair and compassionate thing to do in the face of a 30% increase in business costs is to spread the pain around and reduce hours, benefits, breaks, etc. by a small amount to avoid layoffs. That is the same thing the NDP did during the Rae Days.

It most certainly drives away business if the product or service being sold isn't deemed to be worth the cost. That has nothing to do with wages and everything to do with perceptions of quality and value.

 

[SunriseChampion]

I thought 30% is a common value for employee overhead.

I'm not entirely sure what the rough value would be. I know off the top of my head and can estimate it based on our company's payroll. I'm not involved with accounting at our company, but do payroll once in a while. It may indeed be as much as 30%.

 

[PinkLucy]

30% is including non-mandatory benefits. Bare minimum is vacation pay, WSIB costs (depends on the industry), the employer share of EI and CPP. Then you start adding the employer share of any benefits, vacation pay beyond employment standards and any other perks.

 

[BurlOak]

30% is including non-mandatory benefits. Bare minimum is vacation pay, WSIB costs (depends on the industry), the employer share of EI and CPP. Then you start adding the employer share of any benefits, vacation pay beyond employment standards and any other perks.

So Tim's is trying to reduce the generous 30% to whatever the mandatory is?

 

[PinkLucy]

I don't know that Tim's was ever as high as 30%!

Also this news: https://www.cp24.com/news/wynne-to-shuffle-cabinet-less-than-five-months-before-election-1.3762841

 

[AlvinofDiaspar]

I highly, highly doubt that minimum wage jobs offer great non-mandatory benefits; and a good chunk of these jobs are also part-time, which drives the benefits even lower.

AoD

 

[BurlOak]

I highly, highly doubt that minimum wage jobs offer great non-mandatory benefits; and a good chunk of these jobs are also part-time, which drives the benefits even lower.

AoD

Then there is no Tim's controversy.
There were non-mandatory benefits that Tim's is removing. My understanding is that Tim's is still providing all mandatory benefits.

 

[AlvinofDiaspar]

Then there is no Tim's controversy.
There were non-mandatory benefits that Tim's is removing. My understanding is that Tim's is still providing all mandatory benefits.

You missed the point - which is the increase in minimum wage is intended to increase the amount of net compensation to workers relative to the current baseline; not horsetrading between one type of benefit to another. In essence, it is intended to move people up from where they are now - and this action by the franchisee goes against that goal.

AoD

 

[narduch]

The minimum wage increase is actually very popular policy. Most people actually support it, despite all the crying from some businesses and those in the right-wing media.

I'm not a fan of the Wynne Liberals but this was a smart political move. It cut off the NDP's legs because they stole one of their main policy ideas. Even the Conservatives admit they won't be cutting it back (they will just move more slower to $15).

The daycare issue is classic Liberal blowback. Looks like they weren't expecting the fees to increase so quickly. Parents are complaining about it. And so their solution is to throw even more money at the problem (in for form of grants to centres). And it appears to not be working, fees are still going up.

 

[narduch]

Wanted to also add that studies show that in the long run minimum wage increases end up being a net benefit to the economy.

This is anecdotal, but I saw the other day that there was actually an increase in restaurant jobs in Alberta since they increased their minimum wage. It wasn't the end of the world like some people want us to believe.

 

[AlvinofDiaspar]

The minimum wage increase is actually very popular policy. Most people actually support it, despite all the crying from some businesses and those in the right-wing media.

I'm not a fan of the Wynne Liberals but this was a smart political move. It cut off the NDP's legs because they stole one of their main policy ideas. Even the Conservatives admit they won't be cutting it back (they will just move more slower to $15).

The daycare issue is classic Liberal blowback. Looks like they weren't expecting the fees to increase so quickly. Parents are complaining about it. And so their solution is to throw even more money at the problem (in for form of grants to centres). And it appears to not be working, fees are still going up.

You can't avoid the unintended consequence considering a whole segment of services are built on low-wage workers - daycare and personal care being two prominent areas. To be perfectly honest, I am not sure how reasonable it is to expect putting your child in a secure, controlled environment to be cheap in the first place.

Now having said that, availability of daycare has labour market implications and it really is something society has to decide how they should tackle. On the flip side, offering a higher wage may actually encourage worker retention and reduce turnover - which is also a business cost.

AoD

 

[NorthYorkEd]

Wanted to also add that studies show that in the long run minimum wage increases end up being a net benefit to the economy.

This is anecdotal, but I saw the other day that there was actually an increase in restaurant jobs in Alberta since they increased their minimum wage. It wasn't the end of the world like some people want us to believe.

The arguments against the hike reminded me of when they started making moves to ban smoking in public places in NS. Restaurant and bar owners were crying that half of their customers would vanish. Oddly enough, despite the ban, people are still going out to eat and drink.