Unit 2: Financial Management and Business Organization

Ch 5: Business Organization and Finance

 

Minimum wage rises, but workers still suffering

Ontario's minimum wage has not lifted workers above the poverty line since 1976, says a new report from the Canadian Centre for Policy Alternatives.

 

 

 

 

 

 

 

 

 

 

 

ANDREW FRANCIS WALLACE / TORONTO STAR FILE PHOTO

Workers rally to push the government to introduce a $15-an-hour minimum wage during a protest outside the Ministry of Labour offices in April. The minimum wage rises to $11.25 Oct. 1.

 

By: Sara Mojtehedzadeh Work and Wealth reporter, Published on Thu Oct 01 2015

 

Ontario’s minimum wage creeps up today, from $11 an hour to $11.25. But the boost won’t give much relief to the province’s growing number of precarious and low-wage workers, according to a new report.

 

That’s because current minimum wage levels would have to increase by a full 25 per cent in order to meet the standard set in 1976, when a minimum wage job lifted a worker above the poverty line.

 

In Toronto, minimum wage is still 61 per cent less than the hourly sum needed by a working family to scrape by, the research by left-leaning think tank the Canadian Centre for Policy Alternatives shows.

 

And across the province, a full-time job at Ontario’s current minimum wage still leaves a worker around 20 per cent below the province’s low income measure — while in 1976, minimum wage brought workers just above it.

 

“By every benchmark the government could have looked at, the minimum wage doesn’t measure up,” said the report’s author Kaylie Tiessen.

 

Today’s wage increase takes affect after the Liberal government pledged last year to tie minimum wage hikes to inflation. But to do so, it set a baseline rate of $11 an hour that future increases would build on — a figure the report calls arbitrary and inadequate.

 

“What we’re saying here is, the job is only half done,” said Tiessen.

“Tying the minimum wage to inflation is a really, really important step in the right direction. But we also need to talk about this benchmark, and what the benchmark could be.”

 

The report advocates setting the minimum wage to within 50 to 60 per cent of Ontario’s average wage. That, it says, was the practice until the 1990s when Mike Harris’s Conservative government froze the minimum wage.

 

If implemented today, the policy would set the province’s minimum hourly pay to around $15 an hour — the sum living wage advocates call a “decent minimum wage.”

The task is particularly important given that Ontario’s low-wage workforce has grown by 94 per cent over the past two decades, compared to 30 per cent growth in total employment.

 

Miranda White, a single mother with two children, experienced that shift first hand after she lost her unionized job as a factory manager around 10 years ago. She now works for a non-unionized Toronto grocery store at minimum wage and says she often struggles to make rent and pay bills on time.

 

“I used to make money. I used to have a car. I used to have money to spend,” she said at a fair wages rally organized Wednesday by the Toronto-based Workers’ Action Centre.

 

“If I made $15 an hour, then I wouldn’t have to do all this stuff I have to do (to get by). I could go out, I could go to the movies, I could buy a cup of coffee, I could pay my bills on time.”

 

The minimum wage for special categories like students and liquor servers also increases. For students, the rate rises from $10.30 an hour to $10.55. Liquor servers’ hourly minimum goes up from $9.55 to $9.80.

 

The Ontario government is currently reviewing its outdated employment laws, which exempt workers in numerous sectors from being paid a minimum wage.

 

Although those loopholes will be examined, the review will not assess whether the province’s overall minimum wage is high enough — despite recommendations from workers’ rights advocates and even some private businesses.

 

“We have more people who are working in poorer quality jobs just trying to make ends meet,” Tiessen said. “At a time when we have a squeezed middle class then one of the solutions to that is to ensure that people earning at the bottom are earning enough to get by.”

 

Summary

            The recent minimum wage increase for the workers of Toronto is described in an article written by Sara Mojtehedzadeh and published by the Toronto Star on October 1st, 2015. As of October 1st, 2015, the minimum wage will increase from $11.00 to $11.25 an hour. However, the boost is reported to still not be enough for the citizens of Ontario. In 1976, a minimum wage job lifted a worker above the poverty line, however the current wage would have to increase by a full 25% in order to meet that standard. The minimum wage increase came into effect today after the Liberal government pledged to tie minimum wage to the hikes in inflation last year. A news report promotes setting the minimum wage price to within 50% to 60% of Ontario’s average wage, which would be $15.00 per hour. This goal for a higher minimum wage is especially important as Ontario’s low-wage workforce has grown by 94% over the past two decades. Miranda White is a single mother of two children who is currently working a minimum wage job. She said “if I made $15 an hour, then I wouldn’t have to do all this stuff I have to do to get by.” In addition to the general wage increase, the students, and liquor servers minimum wage has also increased from $10.30 to $10.55, and $9.55 to $9.80 respectfully.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Economic Concept

            The concept of floor prices as well as government regulations have been discussed in class. The article is discussing the new minimum wage increase that was brought forth under the orders of the government. A floor price is a restriction placed by the government to prevent a price, or in this case, a salary from falling below a certain level. Minimum wage is an example of a floor price as the government is making it illegal for a worker to be payed below a certain amount. A government regulation is a rule brought forth by the government that must be followed. Minimum wage is an example of a government regulation, as it is a rule made by the government that everyone must follow. This increase in minimum wage is a method used to combat poverty. Poverty is the state of being extremely poor. By increasing minimum wage, the government is attempting to provide workers with a higher income so that poverty levels in Ontario are reduced. Cost of living allowance are increases in wages and salaries meant to help workers deal with the effects of inflation. Inflation causes the price of goods and services to increase, making it harder to survive with a low salary. Cost of living allowance is a way for workers to demand higher wager in order for them just to survive and provide themselves with the three necessities; food, clothing and shelter.

 

Floor Price: Restrictions placed by the government in order to prevent the price from going below a certain level

 

Cost of Living Allowance: Wage or salary increases meant to help workers deal with the effects of inflation

 

Government Regulations: Rules that the government makes that must be followed

 

Poverty: The state of being extremely poor