$16.55.
That’s how much those being paid minimum wage will earn, per hour, by the time you read this.
For those unaware, the province raised minimum wage on Oct. 1 to the aforementioned $16.55 per hour, an increase of $1.05 from the previous minimum wage of $15.50 per hour.
As someone who once worked for minimum wage, I can’t help but be happy for those who work in those often-underappreciated jobs. For those individuals, this is a great boost for their wallets, especially in a time where the living wage – what a worker needs to earn, per hour, at 40 hours per week, in order to make ends meet where they live – is still significantly higher.
For context, the living wage, as defined by Ontario Living Wage Network, is $20.70 per hour in Huron-Perth and Grey-Bruce.
While this is a step toward closing that wage gap, there may be some negative impacts.
Many companies are likely to “pass the buck” onto the consumer in the next few weeks.
That loaf of bread that used to cost $4 will now be $4.10.
That $20 meal at a restaurant will soon cost $22.
That $2.09 large coffee will soon be $2.19.
Why?
“Due to an increase in labour costs, we have had to increase our prices.”
Oddly enough, that 6.8 per cent per hour increase to minimum wage will likely be matched by a 6.8 per cent increase in profit for the grocery chains, gas companies, and others.
There is no denying that something has to be done to help combat inflation. I wish I knew what the answer is, but I am afraid we will never know in the current economy we live in.
Several businesses are toting record profits – the grocery store chains come to mind immediately – on the back of raising prices for goods at rates higher than inflation. The overall inflation rate for July 2023, for example, was 3.3 per cent. For groceries it was 8.5 per cent. Food inflation is a mixed bag of issues – contracts made with processors and producers months in advance, thus delaying inflation at the till; supply and demand; and a little bit of greed (we need to eat, regardless of the price of a pound of chicken or a carton of milk).
Generally speaking, those who work minimum wage jobs are also renters. Rent is increasing every time you turn around as demand has far surpassed supply. The lack of supply of houses, again, is a mixed issue – lack of skilled trades to build the number of houses needed; higher prices on some materials due to various issues (if there is a forest fire, the price of wood goes up); and a lack of developers looking to build truly affordable rental units and homes (again, greed comes into play).
So how does this all relate to increasing minimum wage, and why there will be unintended consequences?
Companies are likely to raise prices to offset the additional cost of labour, those who were living above the living wage will see their expenses go up – as do those who are now earning minimum wage – and we have the same problem all over again.
Except this time, you have closed the gap between the living wage and minimum wage, thus making things tougher for a greater number of people.
What about those workers making just-above minimum wage? Will those workers get a similar boost?
Chances are – and this is not intended as a shot against any employers – likely not.
I say likely not, because I have spoken to some employers recently who have said, “I have no choice” when it comes to giving those making, for example $17 per hour, an increase as well.
“If I don’t, how can I expect those workers – some who have been here for years – to train a new employee when they are making 50 cents an hour more?” one employer told me, off the record.
Not all employers will have the same thought process, especially those who are more concerned about maximizing the bottom line and profit share over making sure the people in their employ – the ones who make the big bottom lines and profit share possible – are compensated appropriately.
Ultimately, I don’t know how to feel about raising minimum wage. It’s a great idea on paper, but there are far too many variables outside of the province’s control to ensure it works as intended.
What I do know is this – those earning minimum wage, you are vastly underappreciated and you deserve the $1.05 more per hour.
I just hope all employers are like the ones I have talked to, and give the rest of their staff a similar bump in pay.
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Mike Wilson is the editor of the Walkerton Herald-Times. Comments and feedback are welcome at mwilson@midwesternnewspapers.com.
