Clark increases B.C. minimum wage after decade-long freeze

OMG - BC is doomed, if we go by comments from CKA posters. How will business ever be able to afford this? Will the last Tim Horton's to leave BC please turn off the lights.

Congratulations Andy. Now you won't have to rely on a performance evaluation to get a raise.

, andyt, .

What has been said is that those working at Tim Hortons generally are working there for a reason -- because they are incapable of working many other jobs. However, no one has ever said that we are doomed because of rises in Minimum Wages, only that Minimum Wages do not help the economy, living standards, wage equality and unemployment the way people think it does. The quoted bit is here:



That is from a labour economist, or an expert, on the topic. His comment is not alone here, and I am sure I could find numerable bits of literature to support this with a quick google search. It's one of the most basic economic theories you can discover on your own, let alone reading about it in a book, or online.

For the record, it's not hard to actually see the impact of minimum wage on unemployment to see that there is indeed a negative impact on unemployment due to an increase in the minimum wage. All you have to do is make the multivariate regression and correct for auto-regressive errors, as there is a limited amount of autocorrelation in the results. This is fairly simple using any basic statistics program. I did the majority of it in about five minutes before, and I corrected for autocorrelation in a second set (that I should get around to posting, haha!). Even from that limited statistical test, we begin to see the trends.

My own position has been routinely that a change in the minimum wage will be a larger negative impact than immigration would have, and I have gone to great lengths for this to be recognized using various academic . Consider that my position shows a generally negligible impact with a low statistical significance for immigration on unemployment, especially in the long run. In other words, I am saying the impact of a rise in minimum wage has a larger than negligible impact on the unemployment rate, although the ILO has stated that nations with recent job losses will likely skew those results. In cases where there is not a significant impact on unemployment, typically the minimum wage price level, or what minimum wage earners spend money on, (WARNING: PDF FILE).

In short, following the increase, expect a noticeable increase in the unemployment rate or a noticeable increase in the low-end CPI. It is certainly not something which will cause chaos and make the market go haywire, and no one has claimed that. Only that, in reality for Canadians, minimum wage generally does not help us as much, or in the way, that people think.

It�s fine and dandy to say supply and demand, the slope of the curve, increases in minimum wage costs jobs. However, low wages are highly dysfunctional. For one a minimum wage worker doesn�t pay much tax, about $8,000 a year less than average, it�s a subsidy. It�s welfare. Tim Horton�s is an alternative to welfare. The low wage sector is not bums rather it�s significantly Mom�s who raised children first, the reduction in jobs from a pay raise can be taken out of immigration, and the bottom of the economy is largely goods and services that we can simply do with out, with less of. Training people on minimum wage would not reduce the number of minimum wage jobs, it�s a different topic. Low wages are exploitive and mean and to maintain civility you have to watch that. So supply and demand is only part of the equation, maybe half.

Wanting to doom people to working poverty is just being a heartless bastard. Trying to justify it by saying "Most of the folks doing shit jobs are either lazy, stupid, young, unskilled or some combination of the four," just makes it worse. Other countries manage to have higher living standards for people at the bottom of the . They haven't sunk into financial ruin. We can do it too.

On a related note,

So Lemmy might be OK, but you may wind up eating your words, Khar, as on of the few guys who's still at the top (making the really big buck) uses your own regression analysis to show you why you're not worth more than a poverty wage yourself.

I'll do a Khar on this post:




It will also add to government revenues, as those workers pay more taxes.

I've been quite negative about some structures of the universities for years, so there is no need for you to point out the problems with the current knowledge industry to me. Indeed, as I pointed out in the recent education thread, the concept of over-education (and the impact it has on related fields) is not exactly a new idea, or one which has come without warning. However, I do have to press the point that no where in that article does it state that I would have to earn below or near poverty levels, only that I am an expensive person to hire on the international scale. Like most Canadians, I have open options in other fields -- indeed, if I wanted to, there is a demand for people like me in various business and resource areas.

This is also one of the reasons why I am very supportive of R&D spending (I was not happy when Harper's new budget appeared to include massive R&D cuts) and the focus on creating long term centers of research and learning in Canada -- I want a place where we are the leading experts on various forms of technology, and hence where it would be difficult for other nations to compete with us. Luckily, we have an edge in being a resource economy, giving us a surprising amount of stability and power in a few ways other nations do not have.

Ironically, coming from a family of farmers, I have already been in an industry which should be dominated by other nations, the developing nations, and yet I still champion the positions I do now simply because it would be better for everyone involved. By being expensive farmers, my family drove up the cost of food for the low income in our nation, sucked massive amounts of money out of the government that could be going elsewhere, perpetuated poverty in other nations and caused political problems between Canada and some other nations. None of my family farms anymore, for the record. We all moved on to other fields with better opportunities.

There are two things which you have overlooked in your second response to my post, and they are somewhat significant. First, as I stated in my post, in situations where empirical evidence of an increase in unemployment is lacking, there tends to be an increase in the low-level CPI. That means that his article is consistent with what I have stated previously as seen in the bottom of that article, which you have underlined.

Second, the paper states several things which you have overlooked. Primarily, it notes problems with methodology -- it cannot account for all hours, for example, and hence there is likely some hidden unemployment. The scope is limited to minimum wage earners in a specific industry, and the paper also notices that in these case studies an increase in minimum wage has little increase in the earning potential of the people in these industries in the conclusion with an elasticity close to -1. Indeed, the paper goes on to state that minimum wage is not an effective method to improve the earnings of workers in those industries (halfway down page 962).

Either way, my previous post stands and continues to be correct. There will be a noticeable increase in the low-end CPI, it will not cause chaos, and it does not help us in the way that people think. Indeed, it does not do much to help at all.

It is awesome of you to bring up that paper though, as I think it's a very important thing for people to read and to understand in detail. There is a bit of an ongoing debate in the economic community as to how minimum wage impacts the employed, and it's been going on for, oh, a decade and a half now? In my post, I did account for the other possibilities when I responded, but I still do believe that in the context of Canada, minimum wage generally has a negative impact on employment through a rise in the unemployment rate, as is supported by domestic evidence on the issue. Thanks for bringing that paper into this discussion!

Aside from maybe raising the price of a hamburger 5c, the poor bastard at minimum wage will be able to afford 25% more hamburgers for a net gain.
Employers like me will just be pickier, there were enough people who didn't deserve $8 an hour. I won't be training anyone how to run a till or stock a shelf, your resume will go in the round file if you don't already know.

An interesting side note: If you serve liquor the minimum wage only goes up to $9.00hr
A bribe to the exclusively Liberal bar owners?
Or punishment for not serving liquor in your restaurant?
You decide.

(Hah! The question reminds me of a headline I saw decades ago: "Communism: Threat or Menace?")

I'm sure YOU will NEVER complain about the rise in cost to you for milk, bread,eggs, food in general, newspaper at your door, bike tires, clothing, new bike riding attire, booze, chocolate bars, movie rentals, pens, pencils, erasers, household cleaners, paint, lightbulbs, toilet paper, paper towel, salt, pepper, coffee, tea, .....

Ah, the real selfish reason comes out. Other people should work at poverty level wages so you can get cheap asswipe. (Actually no asswipe is produced in Canada.) You should reduce your income to $8 so people can get cheaper floors.


Don't worry about the cost of food. Agricultural workers are exempt from minimum wage laws, so we can keep exploiting them to get a bit cheaper food. (Such as is produced here). And milk and eggs are under marketing boards, so their prices are kept artificially high so farmers can make a good buck. Lets go after them - we can get those things a lot cheaper in the US.


No, I won't complain about the minuscule portion of the price of those things that involves people earning at or near the minimum wage. Not if it means those people can have a bit better life. They in turn will be able to buy more milk, bread,eggs, food in general, newspaper at your door, bike tires, clothing, new bike riding attire, booze, chocolate bars, movie rentals, pens, pencils, erasers, household cleaners, paint, lightbulbs, toilet paper, paper towel, salt, pepper, coffee, tea, ..... which will stimulate the economy. That's the nice thing about giving poor people a bit more money - they spend all of it, because even at $10.25/hour you're not going to build up much of a portfolio. It just means they might be able to go to the dentist more often, saving the medical system big bucks because bad teeth will make you sick. They might be able to put a bit aside to take some training and thus get a better job. They might lead a life that's a bit less stressed about making the rent and putting food on the table, which means the kids grow up in a happier home. They might be able to afford the odd enrichment activity or sports for their kids, so that they grow up to be happier, healthier citizens who can contribute more to society.......

Yet, the empirical evidence shows that the end bit of your post does not happen, save for potential price hikes. The paper you just posted notes that this does not happen. Papers I have posted have demonstrated that this does not happen. Raising the minimum wage does not have the impact you are giving it here. Indeed, what Yogi has implied is correct, and is backed up by your own source.

While you are right about our agricultural sector, that sector is given a series of subsidies and price fixing structures which allow for a good deal of support, which causes a good deal of deadweight loss and how much it costs low-income families as well as other folks. This is an ongoing investment which Canadians lose on, because each year we sink money and don't expect to get any back in the long run, so that we may pay more money on what is produced to block other nations from getting in edgewise in our market.

The best thing for us to do is move further and further away from farming, leaving what remains to fewer and fewer people (as has been the ongoing trend for the past few centuries, I remind you) and import our food at lower cost while those who once would have been farmers begin taking jobs elsewhere. However, this is certainly a side discussion to minimum wage, but with urbanization of many nations expanding further and further, it's worth noting that this is what should happen naturally. It is also a good example of how forcing wages higher negatively impacts the CPI, something the literature you posted notes is prevalent in it's case study. Since the low end CPI is what is rising, real wages stagnate rather than rise with a minimum wage hike for those at the lower end of the spectrum. Again, the case study in your source reflects this.

Seems to me my source is saying exactly what I'm saying.

Of course increasing wages of low paid people will result in their spending, what do you think they're going to do, see an investment counsellor with all that money to make some big investments? They might save up some of it to use for taking time off work for training for a better job - seems like a good thing to me. Otherwise it means they will buy better quality food and items for the home.

And as I said, you want cheaper asswipe at the expense of people working in poverty, up to you. I'd rather pay a bit more and have people living better lives. How you people can just write off so many to working poverty is beyond me.

It seems that way because you are not reading your source, or the paper your source is based on. You are reading short hand portions and not considering how this impacts other aspects of the labour market. For example, in this case, you are offsetting the amount of demand by the increased marginal and aggregate costs of each employee at the low-end CPI level (incredibly simplified). The end result is, as your paper notes, a price hike with little benefit. This paper does include their empirical results showing this.

Second, he is talking about durable goods, and these durable goods are not being bought by those who are earning minimum wage. None of the goods you mentioned were durable goods -- they were consumables and services. The people who are benefiting, as the paragraph right before what you quoted said, are "those earning up to 25 per cent more than the minimum wage," or more as the source states. You passed straight over the paragraph which showed you are wrong to misinterpret the one after it to use it as a rebuttal.

In other words, the news article straight out says paraphrased "this does not help those with minimum wage, and does not increase demand from/for those who are at the minimum wage." Again, andyt, please do not misrepresent positions.

From page 962:



Hence, as I said, your source states right there that it has very little impact on overall income for those working at minimum wage levels. No one at the minimum wage level gains from this, and the paper suggests that it may even increase inequality by the aforementioned spillover effect.

In other words, I am not overlooking poverty. In fact, everything I have said and what I support is driven towards helping those in poverty. I am saying that your method does not help, and it does not work. It makes things worse. Your source states it. The paper your source is based on states it. What I have posted before states it.

I am being very brief here, andyt. There are many portions of this study which clearly contradict what you have said. It notes that in rises as great as BC's will be, the results of this paper are muted -- unemployment will rise. The writers of the paper note that it is more about low-wage earners and not minimum wage earners, as those are the ones who benefit from this -- not those at the minimum wage level. It notes differences between other industries, and how this raises prices at the low-end CPI. The paper straight out states it cannot account for the hidden unemployment impacts, which implies it could have pitfalls the study it is based off of had.

The science appears sound at a glance. And it does not agree with you. This will not help minimum wage earners. This will harm them. It will harm those who have to pay the costs, it will cause greater inequality in Canada, it will increase the CPI and potentially raise unemployment. Not by a large amount, mind you, but it won't be helping like you think it will.

Your source is not saying what you are saying it does, and I am not condemning them to poverty. Indeed, I am looking at not only national "poverty" (which I feel is a question of semantics here) but also international poverty.

The employer market won't last forever. The population is aging and the labour force shrinking, they may get immigration tamed - unemployment may fall one day. At that time you'll have to deal with wage pressure at the bottom. Nothing lasts forever.