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Minimum wage: Can stability keep Canadian retailers alive?

Tuesday, April 15, 2014   by: Darren Taylor

Workers struggling to make ends meet while working for minimum wage will get a small break this summer, but how does the retail industry feel about it?

Larger retailers such as Sears Canada reserved comment on the minimum wage issue, and instead referred SooToday.com to the Retail Council of Canada (RCC).

The Toronto-based RCC is a not-for-profit group representing 45,000 retail outlets across Canada, and works with all levels of government to support the retail sector.

“If you can attach minimum wage to an economic indicator like the Consumer Price Index, that would be the way to go,” Gary Rygus, RCC Director of Government Relations, told SooToday.com.

“Where we are coming from is that we want to have predictability and affordability for employers…the last two years haven’t been tremendous for the retail sector.”

“This will make it easier for businesses because quite frankly, when you would have a freeze in minimum wage, then a big jump from $8 per hour to $10.25 per hour, that was a tough pill to swallow.”

“Now (with the Fair Minimum Wage Act), we can have annual adjustments to minimum wage based on an economic indicator that everybody understands and knows…that predictability is very meaningful for businesses.”

Rygus said the proposed legislation will help the Canadian retail sector stay alive in the face of competition from U.S. retailers and online retailers.

“We support this legislation because it allows employers to plan as opposed to being attached to political whims of the day, so that’s why we approve of the bill that’s going forward,” Rygus said.

“We’re trying to make sure the political parties support it so it becomes law before any spring election…we don’t want it to die.”

Beginning June 1, Ontario’s minimum wage will increase from $10.25 per hour to $11 per hour (the highest minimum wage in Canada).

In addition, the Ontario government introduced its Fair Minimum Wage Act in February.

The bill, if passed, would tie future annual minimum wage increases to the Consumer Price Index, otherwise known as the rate of inflation, in an effort to make sure the province's minimum wage keeps up with the cost of living for individuals and families.

The legislation would provide predictable, manageable increases in the amount of money employers have to pay their workers.

Workers say the increase is not enough.

Critics, such as anti-poverty activists and union representatives, also say $11 per hour is not enough, and have called for minimum wage to be jacked up to $14 per hour.

As for employers, such as retailers and small business owners, the increase to $11 per hour is worrisome enough on its own, apart from the Fair Minimum Wage Act’s plan to keep increasing minimum wage by yearly increments.

The Fair Minimum Wage Act has passed second reading in the Ontario Legislature, and the Liberal government is urging the Progressive Conservatives and the NDP to support it.

With Premier Kathleen Wynne’s Liberals in a minority government situation, and with speculation growing that an Ontario general election looms, the Fair Minimum Wage Act may not pass.

"It’s better for employers for minimum wage to go up in smaller increments than for it be frozen, and then have a significant jump or increase that would have a detrimental effect on business," said David Orazietti, Sault Ste. Marie MPP.

“That’s why we don’t support an immediate increase to $14 an hour…what would businesses say to that?”

“This increase (as proposed under the government’s Fair Minimum Wage Act) is more sustainable for businesses and avoids larger spikes in costs that would be more damaging and negative to businesses,” Orazietti said. 

Related SooToday.com reading

Minimum wage: How employers feel
Minimum wage: How an employee feels
Comments
23
Note: Comments that appear on the site are not the opinion of SooToday.com. If you see an abusive post, please click the link beside the post to report it.
algoma terra ventures 4/15/2014 9:31:26 AM Report

If the government is going to tie minimum wage into the cost of living, then they should also tie it to the old age pension and all other forms of government cheques.
ThinkAgain 4/15/2014 10:19:01 AM Report

Its time to make a stand, everything else goes up drastically why not minimum wage.
amshld 4/15/2014 10:32:35 AM Report

I have zero sympathy for retailers??? nor would I for any corporation such as sears...Minimum wage needs to be at least 14 ...I believe it should be 16 in order to keep up with inflation..It is really sad that northern Ontario has zero support from the provincial government...
nobodycares 4/15/2014 10:59:01 AM Report

If minimum wage increased to $14.00, which is a 35% increase. The union employees that make $20.00+ will also want the same increase. The problem is they work on percentages. Therefore they would want a 7.00+ increase, 35% increase. Same with government employees. So by the time retailer prices, taxes, rents, etc. increase by 35% only the rich will be richer and the minimum wage employees will still be in the same situation, maybe worse off.
Sam C 4/15/2014 11:23:12 AM Report

ThinkAgain... the minimum wage should be just that, the MINIMUM. The problem we are facing is employers have no incentive to increase wages, whether for merit or length of service.

There was a time when the Minimum Wage was the starting wage, and employees received incremental increases on a regular basis.

Now, with jobs somewhat scarce, they can hold wages at the minimum and, if people complain, simply point to the stack of applications of people willing to work for Minimum Wage.

The other problem is that there aren't enough better-paying jobs for people to move to, so they are stuck working for Minimum Wage, often at two or three part-time jobs.

And, as nobodycares points out, if the Minimum Wage goes up, the unionized employees will demand an increase, to preserve their "hard-fought" standard of living.
Battler213 4/15/2014 11:34:38 AM Report

Once minimum wage goes up to $14, so will everything else. You're blind you don't see it. You won't be further ahead. Want to be ahead? Find another job more than minimum wage.
Lone24 4/15/2014 11:55:26 AM Report

Prices will always be on the rise whether minimum wage is increased or not.
mikethedeerman 4/15/2014 11:57:01 AM Report

WHY DONT WE LET GOVERMENT AND CITY WORKERS AND THE MAYOR AND ALL THE MP,S WORK ONE YEAR FOR MINIMUM WAGE SEE HOW THEY DO IN A YEAR . HALF OR MORE WOULD BE GONE CRAZY IN THE FIRST WEEK
Brianne 4/15/2014 12:21:09 PM Report

All in all, this really isn't about minimum wage and that it needs to go up....... it's about that is all that is available for jobs here. Nothing but minimum wage right now.

We should have higher paying jobs available.... that is the point. Hundreds and hundreds of people are screaming for this increase in minimum wage because that's all they have right now.

We either have to leave this province and work somewhere else or start screaming loudly to get the better paying jobs here. Forget about the minimum wage issue, which the gov't wants you to focus on right now due to the lack of better paying jobs available .
Bring on the better paying jobs and leave the lower paying jobs to the young people starting out in the work force.

The NDP..... fighting for poverty and better wages for people........ how about focusing on how you can provide some better paying jobs for people !

We've all done this to ourselves by voting in a majority government.

Lynds 4/15/2014 12:26:46 PM Report

Sam, it's not just "unionized" employees that will want an increase. I'm not sure why you're mocking the request, either. If minimum wage goes to $15.00, it makes jobs where people were required to get Bachelors and Masters degrees for less meaningful. Why should someone go to school to make $20.00/hour, and then have minimum wage rise to 15 without their salary increasing?
Right of Centre 4/15/2014 12:39:09 PM Report

Interesting to see the proposed legislation for an annual increase to minimum wage tied to inflation. This is what allowable rental increases are tied to in Ontario. The allowable rental increase for 2014 is 0.8%.

Minimum wage earners claim an increase to $11.00 is not enough. Landlords have been claiming the annual rental increase is not enough. Perhaps the government should take its fingers out of so many pies, and let the market dictate.
nobodycares 4/15/2014 12:50:14 PM Report

Another issue is that employers that already pay minimum wage and have a small profit margin will make the income back the easiest way they can, in wages. A part time employee working 24 hours @ $10.25 makes $246.00, when their hours are reduced to 16 hours @ $14.00 they now make $224.00 a week. This also creates a reduced level of customer service in the retail sector. Therefore a possiblity in lost sales, more salaries cut. A downward spiral starts. I agree that all jobs should come with an annual increase, not a drastic increase now and then.
IgnorantNortherner 4/15/2014 12:50:50 PM Report

right lynds, everyone seems to ignore this...that's a lot more money in everyone's pocket. Spending would go up overall and like crazy for everyone towards the lower end which increases GDP. Prices will go up more than they would have without the increases but so what? Maybe then you'll question the insane wages you're paying public employees when they demand a proportional increase.

For those of you who support the red team and this Fair Wage Act thingy, know that if it was in place in 1994 when MW was $5.50, MW today going by Canadian CPI (I couldn't find just Ontario but it would have likely been lower since Ontario puts the least weight of any province on food) the MW for 2014 would be a measly $7.90!!!

No wonder every business seems to support the Fair Wage Act...

Also, CPI puts a greater weight on things like window coverings, area rugs, watches and photographic equipment than it does on things you use everyday like butter, flour or sugar! Cigarettes are weighted more than ten times butter, flour or sugar. Alcohol more than twenty times.

I really don't think you want your wage tied to such an easily manipulated stat when there is a strong incentive on the gov'ts side to minimize the CPI stat downwards.
rider_ 4/15/2014 2:10:37 PM Report

don't you understand!!!!! if the minimum wage goes up by even one penny, every retailer on earth is gonna fire every single employee and also stomp on a puppy for good measure, and if you think anything else you're just a braindamaged socialist. so listen up, BUD, people on the bottom LINE gotta STAY THERE on the BOTTOM, LOWER THE MINIMUM WAGE IF ANYTHING, how gonna learn to earn your dollar if you dont do what it takes>... \\STUPID KID... if ya dont like minimum wage, THEN you shoulda got yourself into $80,000 worth of student debts to pursue an education in a job market that's basically an unpredictable minefield!!! MORON!!! MINIMUM WAGE JOBS ARE FOR KIDS ENTERING THE WORKING WORLD. MINIMUM WAGE JOBS ARE FIRST JOBS NOTHING MORE.
Ignore the endless college grads and 40+ people supporting a family on minimum wage, they DO NOT EXIST, these are MCJOBS for KIDS starting OUT. THESE ARE NOT MARGINALIZED CANADIANS, THEY ARE SCUM POORS AND IF THEY CAN'T TAKE THE CAPITALIST HEAT, GET OUT.

UNDER NO CIRCUMSTANCES RAISE MINIMUM WAGE.

Signed,
-Steelplant Union Worker Pickup Truck Man
thera 4/15/2014 2:30:29 PM Report

^^^^^^^
I wish I could like posts here, I can't though, so I give you 10 thumbs up. Sad thing is, I bet some people will read it and assume it's a serious post, agreeing with every "point" you made.
Jmann! 4/15/2014 2:53:02 PM Report

I Really don't understand the concept of making .75 an hour more equaling to more spending ?

to me that's a farce. I'm not debating the subject really, but if you are having a hard time as it is with 10.25 with making ends meet do you think 75 cents more will bail you that much that you can now buy a brand new car say?

If you could never afford a specific item at the lower minimum wage what makes you think you now can at the new minimum wage?

It's a spinning wheel really.
You might find yourself a little less behind the 8 ball until they raise prices again.
Puc for example?

I really don't think any of it is fair but who cares about my feelings right?

SLV1931 4/15/2014 3:58:18 PM Report

This economy is on the brink of a complete meltdown. No one is working. We dont produce ANYTHING. This economy is based on consumerism. All the manufacturing and production jobs are sent to other countries. The only "good" jobs we have here are those created by reckless money printing creating by our irresponsible government. The stock market is an illusion that things are doing well but it is the farthest from the truth. Downsize the government, the money printing, the regulations and bring back the free market.
The working middle class continues to take the hit as banksters are frauding the markets and stealing from the average Joe.

--Joe.

roxpin 4/15/2014 4:34:36 PM Report

try busting your ass of like some do on minimum wage for 650.00$ bi-weekly and you will beg for a 14hr increase. People work less without a sweat and make triple that$$, raise minimum wage to 14 let the poor people experience some recreational money
pastoutla 4/15/2014 5:00:55 PM Report

Orrezetti has never sweated in his life.
Right of Centre 4/15/2014 5:27:19 PM Report

It's interesting that those complaining of minimum wage levels seem to assume that those now making good money have never lived on, or raised families on minimum wage.

Not every good income earner started at that level out of high school, college, or university. Just like now. In the old days (80s, 90s) some of us had to work 60+ hours a week, at multiple minimum wage jobs, just to keep a basic apartment, a landline, and some food. Forget cable, non-existent internet and cell phones.

Some of us couldn't even find minimum wage jobs in this city, and had to...gasp...MOVE to a region with more jobs. Jobs that paid better wages. Jobs that would allow you to support a family.

If it doesn't work for you here, it's time to move where you can find a job, and opportunity.
IgnorantNortherner 4/15/2014 5:53:16 PM Report

RightofCentre, point is, if you wanted to work 60+ hours a week you had that option.

Today, not so much.

Plus, in real wages, what you were making is double today's minimum wage...

...but let's not let facts get in the way of your ego.
Right of Centre 4/16/2014 1:56:45 AM Report

Actually, IgnorantNortherner, there was a time when there were zero hours at minimum wage. That's when I packed my two bags, hopped on a bus, and found a job in another province. Five times I've had to move for wages that allowed for just scraping by with the minimum of necessities. Twice it was across the country, and three times with a spouse and two kids.

Minimum wage from the 80s worth double? I think not. $4 an hour sucked as bad back then as minimum wage does now. There were just fewer had-to-have gadgets back then, and people made their coffee at home. Clothes, by comparison, were more expensive, they were made in North America. A pair of jeans in the 80s would set you back $60 - $90. Now everything's cheap, and made offshore.

Thanks for playing, though.
Right of Centre 4/16/2014 2:02:38 AM Report

IgnorantNortherner, just to add to the above, if you were living on minimum wage in the 80s, and you still are, you're doing it wrong. You've had decades to advance yourself.

If you weren't making minimum wage in the 80s, you are talking out of your butt. You don't know what you're talking about.

Comments
23
Note: Comments that appear on the site are not the opinion of SooToday.com. If you see an abusive post, please click the link beside the post to report it.
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