B.C. minimum wage to rise to $10.25 by 2012

[unit]

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[Tapioca]

Originally Posted by Captain Picard

Too much too quickly

Raise by this much is just asking for trouble, especially in such a short time span.

Ultimately two things will happen:
a) accelerated inflation, thus further driving up our already WTF housing prices

This is a silly point. Housing prices in this market are the result of offshore money, existing home equity, and loose CMHC rules (which have recently been tightened.)

b) increase unemployment rates

The minimum wage will hurt small independent businesses who run on small margins. However, I'm willing to bet that the majority of minimum wage earners work for large companies such as restaurant chains (e.g. McDonald's) that can easily absorb the wages and have to pay higher minimum wages in other jurisdictions such as Ontario.

[ManHo]

Aberdeen Centre is FUCKED

[unit]

Originally Posted by Tapioca

The minimum wage will hurt small independent businesses who run on small margins. However, I'm willing to bet that the majority of minimum wage earners work for large companies such as restaurant chains (e.g. McDonald's) that can easily absorb the wages and have to pay higher minimum wages in other jurisdictions such as Ontario.

thats exactly the problem. the big companies are going to replace minimum wage workers at some point with other means, meaning less jobs for low skilled workers. if the gov jacked up the price of min wage to $20/hr, how many people do you think would be working at mcdonalds? it would be as automated as possible and there would be maybe 1-2 jobs per mcdonalds chain. it would be run like a factory. bigger companies are even bigger cheapasses than small companies. every quarterly meeting they are trying to figure out ways to save more money. they fire higher paid workers and hire new unskilled workers for less money. this is how corporations cut costs. small companies dont have these practices. if they need someone they will keep them.

[iEatClams]

Both sides have vaild points. Businesses have to compete, and people have to live. There are two sides to every story and the truth lies somewhere in the middle.
There are pains to globalization. Business can’t continue to use third world and developing nations labour rates as leverage, nor can labour unions demand high wages or they will drive away business. Somewhere on the fence is the equilibrium min wage.

[TRDood]

Originally Posted by Nightwalker

Inflation. $8 now is not worth as much as $8 a decade ago.

Inflation should not have anything to do with minimum wage. Want to fight inflation? Earn it, not by being told from the government.

In the perfect world, there should have NO minimum wage. However, there should be minimum working standards.

This move by Christy Clark simply wants to buy votes, make some noise for her name. It might fool the average BC resident. Bring back a businessman/economist, not an idealist/feeler.

[TRDood]

Originally Posted by unit

thats exactly the problem. the big companies are going to replace minimum wage workers at some point with other means, meaning less jobs for low skilled workers. if the gov jacked up the price of min wage to $20/hr, how many people do you think would be working at mcdonalds? it would be as automated as possible and there would be maybe 1-2 jobs per mcdonalds chain. it would be run like a factory. bigger companies are even bigger cheapasses than small companies. every quarterly meeting they are trying to figure out ways to save more money. they fire higher paid workers and hire new unskilled workers for less money. this is how corporations cut costs. small companies dont have these practices. if they need someone they will keep them.

Not really, there's something called tradable goods/labour and non-tradable goods/labour. Yes, capital from your global chains can move internationally, but the service sector (which represents about 70%-80% of BC GDP, source:BC Stats) is not entirely mobile.

[CP.AR]

Originally Posted by Tapioca

This is a silly point. Housing prices in this market are the result of offshore money, existing home equity, and loose CMHC rules (which have recently been tightened.)



The minimum wage will hurt small independent businesses who run on small margins. However, I'm willing to bet that the majority of minimum wage earners work for large companies such as restaurant chains (e.g. McDonald's) that can easily absorb the wages and have to pay higher minimum wages in other jurisdictions such as Ontario.

I agree with your housing argument, but when we further push the boundaries of "what can be afforded" (ie: in terms of rent), wouldn't that act as an upward force in the housing market?

as for the absorption of the minimum wage. Sure McDonalds can easily absorb the impact no questions asked. But will they choose to do that and make less profit, or in turn cut cost (ie: cut hours/jobs) to keep their profit stream constant?

OR
they can raise prices, which MIGHT I repeat... MIGHT have a negative impact on their sales, which will also ultimately lead to a decrease in profit. Why I stress the MIGHT is because McDonalds is a household name - unless they jack up the prices to highway prices, It might happen so that the effects of the price increase is negligable

it's screwy this, I really hope Clark did her homework

[TRDood]

Originally Posted by Captain Picard

Too much too quickly

Raise by this much is just asking for trouble, especially in such a short time span.

Ultimately two things will happen:
a) accelerated inflation, thus further driving up our already WTF housing prices
b) increase unemployment rates

The economy only has so much money in it. If a firm say... marks up their prices by 30%, their profit margin is now gone. Solution? start laying people off.
Increase wages = increased cost for firms.
firms want to profit maximize by minimizing costs.

so well Ms. Clark, be prepared to face questions such as "how are we going to deal with the current increasing rate of unemployment?" in about a year.

a) Housing prices and unemployment rates/employment rates/minimum wage is uncorrelated. Housing prices have been accelerating far more than inflation rates. Point A is irrelevant as Tapoica stated.

b) Increase in unemployment - only for youth, low skilled labour, people who makes near the bottom. A good thing can might be that a higher minimum wage create incentives for people to work and not collect EI. However, I think that the costs of raising minimum wage > incentives as it takes EFFORT to work.

If I recall correctly, the latest LFS report indicates that BC (or Vancouver) has higher than national average unemployment rates. This means 2 things:

1. Firms are cutting back on hiring, bad sign.
2. BC people are not looking for work. (look at the definition of Canada's unemployment rate calculations, actually it's quite different from USA)

[Gh0stRider]

$10 baller...i still need to catch up to $14 baller :IDL

[optiblue]

Higher wages = staff cuts!!! Just look at Nursing for example!
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[Mr.HappySilp]

LOL It would be funny if every 3months all these big chain stores fire their employees to cut cost =D.

[falcon]

Originally Posted by StylinRed

I meant as in the inevitable? tolls on all bridges

The increasing carbon tax

whatever else is coming etc

wasn't referring to income tax

Running a country isn't cheap.

Would you like no health care? Dirt roads? Mabye NO bridges instead?

Seriously, people need to get their heads out of their asses and realize how GOOD we have it in Canada.

[Shades]

Originally Posted by achiam

That's actually quite a high minimum wage compared to many other places.
In London, UK, everything is effectively 1.5x the price of shit back home in Vancouver, yet the minimum wage is 5.95 pounds, which is about $8.
People still survive, but they live hella far out and commute into the city to work for peanuts.

Yep, friends who went to school in London had to partition their meat when they cooked.

[skiiipi]

Having worked in retail for the past 9 years, I can tell you that for industries like ours, rasing the minimum wage is a "bad" idea.

Sure it is tough for a person to survive on $8 per hour, however, many people working these $8 per hour job are not supporting themselves with their wage, the money is simply "spending money" to most of the people working for minimum wage.

Many high school students often go work in retail or food/beverage industry to gain some experiance in the working world before going into university, companies like hiring these high school kids due to the lower salary demands (most do not mind working for minimum wage), so these companies can provide these kids with some life experiance, while these kids can help drive down the payroll cost by providing relatively "cheaper" labour. If minimum wage is to increase, whats going to happen is these Highschool kids are going to fall into the competitve wage that most kids in post secondary are going after, ie ($10-$12/hr). From a company stand point, if I'm choosing between a highschool kid at $10.25 vs a college kid at $10.50, I'd much rather spend the extra 25cents to get someone that is potentailly avaliable to work more than just evenings and weekends. These college kids will also tend to have more life experiance. This will make it extremely hard for highschool kids to get job experiance, since the market will become more competitive.

In addition, by raising the minimum wage, it will actually lower the amount of jobs avaliable. Most companys, mine included, operations on a fixed percentage payroll vs sales. The number of hours avaliable to schedule is based on total payroll $ avaliable divided by average employee wage. If the avg employee wage was to go up due to the min wage going up, it will simply mean less hours. I work for a national retail chain, and I often look at payroll for stores in ontario (where min wage is higher) compared to us, and there is often no differance (given that the store sales volume is the same). Meaning Ontario stores have just as much $ to spend on staffing their store, however with a higher avg cost, so less hours avaliable for staff. So this makes the job feild even more comepetitive as there is now less hours to go around.

Again these are all retail examples, I'm sure its different in every industry, but people that make minimum wage are often in industries such as retail/fastfood etc.

[FerrariEnzo]

man.. does this mean McDs and all the other fast food joins that hire people at $9 will raise the prices also to cover the loss from paying their workers???

[goo3]

^ hire fewer workers who do more work for that wage

[Tapioca]

Originally Posted by skiiipi

Sure it is tough for a person to survive on $8 per hour, however, many people working these $8 per hour job are not supporting themselves with their wage, the money is simply "spending money" to most of the people working for minimum wage.

Most of the people I see working at Tim Hortons, McD's, etc. are mature adults. Most of the retails shops I patronize (department stores, chains, etc.) are staffed by adults as well. I think it's safe to assume that at least 30-40% of these workers have to support themselves.

Many high school students often go work in retail or food/beverage industry to gain some experiance in the working world before going into university, companies like hiring these high school kids due to the lower salary demands (most do not mind working for minimum wage), so these companies can provide these kids with some life experiance, while these kids can help drive down the payroll cost by providing relatively "cheaper" labour. If minimum wage is to increase, whats going to happen is these Highschool kids are going to fall into the competitve wage that most kids in post secondary are going after, ie ($10-$12/hr). From a company stand point, if I'm choosing between a highschool kid at $10.25 vs a college kid at $10.50, I'd much rather spend the extra 25cents to get someone that is potentailly avaliable to work more than just evenings and weekends. These college kids will also tend to have more life experiance. This will make it extremely hard for highschool kids to get job experiance, since the market will become more competitive.

An honest question: why does your company have to pay the university student $10/hour off the bat? Wouldn't your company only pay them $8/hour? In my experience from working at the lower-end, you get paid according to your experience in the job. If you have no experience in the job or experience in the company, you get paid the lowest wage regardless of age.

[Mr.HappySilp]

I don't see this in any way help min wage workers. So their wages goes up, price of goods will go up accordingly or even more than the raise of the wage to cover the increase cost. So in terms these min wage workers are no better off than making $8.hr

Middle class will suffer the most. Most likely they will not get an increase in wages (Say they were making 18 to 30/hour). So with the price of all the goods going up but their wage stays the same, they now have less money to spend. Sure as someone suggested companies will have to raise their wages to match it but how many company will do that? How will people will sue their company when it fail to follow that practice? How many people will find loop holes to go around it(say change the title of your job description to a different one but you are doing the same work as before but now since you are techinically doing a new role they don't have to give you a raise or lower your starting rate for that job and the apply the wage increase)?

Whats stopping company to fire off a few people to cut cost? What's stoping the company to turn more employees from full time to part time time to save cost?

Instead of raising min wage the gov can cut tax, lower HST, lower income tax, lower fuel gas,etc etc.... which will help everyone.

[anti_rice]

well I guess there will be more self check outs at grocery stores in the next couple of years.

[Jsunu]

Originally Posted by anti_rice

well I guess there will be more self check outs at grocery stores in the next couple of years.

I see an eventual phasing out of all but a few retail employees left at the till... maintaining the self check-out/robot slaves. You already see this shift everywhere in the market.

Once technology gets more sophisticated/cheaper i wouldn't be surpised if places like McDicks would be fully automated.

[achiam]

Stupid people at the bottom of the food chain don't get how economics works.

-Higher minimum wage means costs go up, leading to companies' products being sold at a higher price.
-Consumers from other countries thus purchase less from you, and choose other countries.
-Net business for that local economy thus decreases, as the pricing is less competitive.
-If shit doesn't change, the company either folds up, or packs up and moves to another country that IS cheaper e.g. China.
-Net result? Less and less companies in that area, less jobs etc.

PS: less business = less tax revenue for the government to pay for public programs, which is temporarily offset by increased spending by said minimum wage earners.

[Glove]

Originally Posted by Jsunu

I see an eventual phasing out of all but a few retail employees left at the till... maintaining the self check-out/robot slaves. You already see this shift everywhere in the market.

Once technology gets more sophisticated/cheaper i wouldn't be surpised if places like McDicks would be fully automated.

ya but this would happen regardless of what the minimum wage was

[FI-Z33]

Originally Posted by TRDood

Things to consider:

1. Wages should be priced according to productivity - increase the wage benchmark lead to higher productivity? What is the incentives to work harder?
2. Yes, min wage workers represent only a small fraction of the economy. But this cuts into the profit margins of retail/entry level positions. Do you want to pay higher prices?
3. The increase for workers making above the min wage is not linear. These workers will noy work "as hard".
4. To maintain the same profits, firms will need to increase revenue by raising prices.

Clark is treating the labour market as a homogenous agent, which is a big mistake. I agree that impact on umeployment rates (aggregate) will be minimal. BUT unemployment rates for youth/low skilled workers will spike for sure.

This is going to be another excuse for businesses to raise priced. Fml.

Oh and if we want to talk about black/grey markets, that's going to be another whole thread..
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exactly. i can't agree more!!

[dachinesedude]

for the people who never took any economics courses, STFU plz, some of u guys are making bullshit ass false statements

the only credible person i know of is TRDood, listen to him