Labour Day And Minimum Wage Increases

by Emma Bott

 

To a lot of people, Labour Day is the last weekend of summer. What many people don’t realize is that Labour Day is meant to celebrate the accomplishments of workers and the labour movement (such as an eight-hour workday) and is linked with International Worker’s Day. The dates of these celebrations occur on different days depending on the country; the United States and Canada celebrate it on the first Monday in September, and other places celebrate as the first of May, known as May Day. May Day is even acknowledged in North America; this past May Day saw marches in Washington D.C., Maryland, and Virginia about how harsh immigration policies affect the labour force. Labour Day in Canada is almost as old as Canada is a country. 145 years ago, Labour Day was started in Toronto. The first labour day rally in Canada was a parade staged in support of Toronto Typological Union’s strike for a 58-hour work week.

Nowadays, the length of our workdays is the not the main concern of workers and the labour movement. Adequate pay and compensation for work done are part of a large debate taking place, and it begs the question of whether or not minimum wage provides enough for people to survive or if it can fully support someone. The ideal is that minimum wage ensures citizens of a country a basic quality of life. A commonly held view is that minimum wage shouldn’t be used to support yourself but should be used to supplement your main source of income, as is the case for most students and teenagers. The issue of minimum wage is still prevalent no matter how strong the economy is or how many jobs are available. High housing costs are a problem that makes minimum wage an issue. If we’re being honest, most places are not affordable on minimum wage. If there is no housing, there will be no workers. In areas where housing is expensive, people who work minimum wage jobs will move away. Affordable housing and minimum wage are two issues that are linked together to create a whole new issue. The cost of accommodation varies across different cities.

Victoria has an annual rally at the British Columbia legislature. It is hosted by the Victoria Labour Council. The rally is attended by Union and Business leaders as well as politicians. What makes minimum wage a concern in Victoria is that Victoria is the third most expensive housing market in BC. Dozens of cities across Canada hosted rallies and picnics. Winnipeg hosted a rally back in May to support workers’ rights.

As of August 1, 2017 (according to the Retail Council of Canada), Nunavut and Alberta have the highest minimum wage of $12.20/hour, followed by the Northwest territories at 12.50/hour. Next comes Ontario at $11.40/hour and Yukon at $11.32/hour. Quebec and Prince Edward Island both have minimum wages of $11.25, followed by Manitoba and New Brunswick at $11.00. Nova Scotia and British Columbia both have minimum wages of $10.85/hour. Of all the provinces, Saskatchewan has the lowest minimum wage of $10.72/hour.

The rallies for increased minimum wage also took place in the United States. In California, there were strikes at McDonald’s and other establishments where a majority of workers are paid minimum wage. This is not the first time that rallies and strikes have occurred in California; interesting to note, they have been successful in the past. The protests and rallies of workers in California have been successful in raising the minimum wage to $12.00/hour. The goal for many is to raise the minimum wage to $15.00/hour across the United States.

There are benefits to minimum wage increasing; the increase in wages could go up the pay scale to more skilled and higher-paid labour. Research done by the Federal Reserves in the United States shows that an increase in minimum wage would lead to an increase in durable goods. Demand for goods within an economy increases as the purchasing power of individual increases. A higher minimum wage would also be an incentive for workers who have been laid off to re-enter the workforce. Many people argue that taking a minimum wage job is not worth leaving unemployment as people may be more likely to take minimum wage jobs. The Webb Effect is the concept that higher wage levels lead to higher levels of productivity and efficiency in the workplace. Ideally, the ultimate goal of raising the minimum wage is to bring individuals and families out of poverty and decrease economic inequality. That being said, poverty is caused by more than just the minimum wage. Minimum wage and poverty actually have a weak link. There is also the argument that a higher minimum wage will lead to a lower employee turnover, therefore reducing recruitment and training costs. There is also a belief that higher wages will make employees more loyal to their companies of employment.

Although there are benefits, there are also consequences of raising the minimum wage. Canada has a progressive income tax system. By raising the minimum wage, workers could be pushed into higher tax brackets. Then instead of them making more money to take home, all they are doing is increasing the taxes to the government. The increased wages leads to an increase in labour costs for companies. This could lead to layoffs or hiring freezes. It is more likely that there will be a hiring freeze with fewer jobs available than layoffs. With higher wages, fewer jobs will be available. Neo-classicist economists argue that increases in the minimum wage lead to fewer jobs available for the young and unskilled labour. Companies may cope with the higher labour costs by cutting benefits or training and development opportunities. Employers may cut labour in order to deal with rising wages. With prices rising, the cost of doing business may increase as well. This would happen in markets where the product demand is insensitive to price changes. Another small consequence is that higher minimum wages may lead youth to drop out of school to obtain these jobs.

Finding the perfect minimum wage for society is a balancing act. The wage must be able to provide the workers with the ability to meet their needs. It must also not interfere with the market’s functions. As the Ontario Ministry of Labour states, “setting a minimum wage above the market equilibrium wage would result in a reduction in the for low-wage labour.”

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