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We have all come to a certain age
today where many of us are considering to or already have an occupation.
Usually, a teenager’s first job would pay a minimum wage such as at a fast-food
restaurant. But, ever since Kathleen Wynne, the premier of Ontario, increased
the minimum wage policy from $11.60 to $14 or for students under 18 with a wage
increase from $10.90 to $13.15, many lives and businesses have been affected
drastically (, 2018). For an anecdote, say that you are hungry in the
morning and wish to purchase your preferable breakfast meal from your local Tim
Horton’s- a bagel sandwich combo. Instead of spending the usual $6.77 on the
meal, some Tim Horton’s locations have increased the price to $7 exact; along
with increasing the prices of many other items on their menu (CBC News, 2018). That’s
not going to make you feel fulfilled with their service. The main purpose of
minimum wage is to ensure citizens the lowest salary to support themselves for
a standard living. It was first installed as a federal responsibility in 1965
to cope the post-depression economy and to protect employees in the labour
field with a better working condition by setting a minimum wage of $1.25 (,
2018). In addition, over the course of the decades, the minimum wage has become
a responsibility for each individual province and territory government and they
have changed the prices. But, we need a better minimum wage that will ensure
prosperity for all the hardworking citizens within our nation. I think the minimum
wage increase to 14 dollars in Ontario commencing in action as of January 1st,
2018 was inadequate when it comes to terms of supporting the economy.

Now going back to the anecdote with
Tim Horton’s, they had to increase their prices due to the minimum wage
increase. But why did the minimum wage increase with a huge increment in the
first place. There can be multiple reasons to why this had occurred, but one of
the main reason’s is because of inflation. Inflation is simply defined as a
general increase for prices and a decline in the value of money (The Balance,
2018). So, let us start out with the value of money. In Canada, the value of
our Canadian dollar automatically decreases each year as the government is continuously
printing money to disperse within our economy. According to, a
worldwide inflation data website, back in 2015 the annual inflation rate of
Canada was just 1.61%, whereas in 2016, it was 1.5% and just last year, it was
2.1% (Media, 2018). The decline in the value of the Canadian dollar occurs due to citizens demand for money since there is an
increase in economic and population growth. An example to help better
understand how this process works is by that one episode in SpongeBob Squarepants
titled “One Krabs Trash.” During this episode, Mr. Krabs being the cheap person
he is, was selling his own trash at his yard sale. Then, SpongeBob comes along
to purchase one of Mr. Krabs’ items- the number 1 soda hat which belonged to
Smitty Werbenjaegermanjenson. At first, since Mr. Krabs wasn’t conversant with
this rare hat, he just sold the hat to SpongeBob for 10 dollars. But, after
many other customers came along looking for the same hat that was just sold,
they were offering a much higher price. Here’s a short clip from the episode.
As the episode progresses towards the end, people from the town pull out a
truck load of the same number 1 soda hat. Since there were so many being
retailed meaning the hat is no longer rare, the price exponentially declines
and not many people are interested in purchasing the hat. The same thing is
occurring with our dollar, as more money is being printed out daily, the value
of it goes down. Moving on with how the inflation procedure occurs, the
decreased value of the dollar will make the price of the product to increase
since you would need more dollars to even out the price of the item and be able
to afford it. Perhaps, therefore the penny is not used in the market anymore
due to how it takes more money to make the coin than the actual value of it- 1
cent. With inflation, it will cause demand to grow faster than the supply,
leaving prices to be higher. These could be such necessary or miscellaneous
items like food, clothes, rental price for shelter, technology, entertainment
etc. Finally, since one’s expenses are being increased, it would not make sense
for their wage to remain the same all this time; it would only leave them to
start losing money, remain jobless and potentially face poverty. Therefore,
Kathleen Wynne, the premier of Ontario and her cabinet had to renew the minimum
wage to 14 dollars; a more sufficient minimum wage to allow the nearly lowest
standard of living.

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Now that you have a brief
background knowledge of how inflation related to money works, you shall know
that this certain minimum wage has created such disadvantages to our provincial
economy. For an example, the initial ruination would be just like I’ve
mentioned before- a high incremented increase in the minimum wage will propel
inflation. Ontario’s workers earning the minimum wage would get the opportunity
for having a temporary purchasing power before an increase in the prices of
consumer goods. But then, many businesses will react towards this issue so that
they do not lose their profitable money when paying their workers, the new 14
dollars wage. Therefore, many of these businesses and industries will place the
burden on the customers by charging more for their products (Braun, 2018).

While life in Ontario might be more
expensive, not only will the minimum wage affect the customers, but also the
small businesses themselves. This is due to how higher wages will kill profits,
cut many occupations, and slow the growth of employment which many small businesses
cannot incur to pay off the additional costs. This can possibly make many small
businesses be forced to shut down or take position in a different region. Some
will be encouraged to move abroad in their background country or reduce the
costs in their management. According to the Bank of Canada, the pay floors
increased for the Canadians in Ontario, Alberta, Quebec, and Prince Edward
Islands has estimated a loss of 60,000 jobs across the country by 2019, though
that number can reach as high as 140,000 (Alini, 2018).

Finally, the future reality will establish
many large companies that have a great profit to act with little interests
towards their managing skills for their employees. They would most likely
respond with less working hours for those earning minimum wage and great amount
of work distributed evenly to those with higher salaries than a minimum wage.
Companies also must consider increasing the wages of the higher paid workers to
make it more proportionate and equal to how it was before. While, many smaller
businesses might not have the money for higher paying salaries, the profits of
larger businesses are principally owed to shareholders and investors of the
company rather than the employees. So, moving on, when the companies aren’t
welcoming many employees with minimum wage, companies and businesses would
replace them with a one-time fee of machinery and robots. Although this would
be beneficial for many companies as the management doesn’t have to worry about
the working conditions and the paycheques, this would be crucial to many
low-skilled workers for being replaced by robots. According to the research
group originating in Washington, DC, the members of Brookings Institution have
predicted that if Ontario does eventually hit a minimum wage of 15 dollars
which is to take in affect by January 1, 2019, then businesses will have an
inducement to replace the high priced human labour with automation technology. We’ve
already seen technology being attached to our workforce more and more but with
new wages introduced, automation can be accelerated to permanently taking all
shifts for laboured based jobs in the leading future (Braun,

The minimum wage increase can come
into consideration of being a benefit for many Canadians. For example, it gives
the lowest wages workers to have more purchasing power. While the value of the
dollar goes down, the expenses citizens have will go up so this offset had made
it harder for many people with low earnings to pay off their necessities such
as food, clothes, shelter and education. So, increasing the wage will give
money for those who need it and boost the economy. Premier Kathleen Wynne with
the province’s minister of labour had announced in 2017, “People who are
working at the minimum wage spend that money. That money goes back into the
economy and that’s a good thing for business,” said Wynne. “If their employees
feel secure and they are loyal to the business and they want to stay, that’s good
for their business as well (CBC News, 2018).” Along with that, this reduces
income inequality as it brings in money flowing within the lower and middle
class when people spend their money towards businesses that hire minimum waged
employees like different fast-food restaurants and small businesses. While,
there can be benefits towards this new provincial policy, one should look at a
long-term basis of how businesses will react. Businesses will eventually take
offense towards this offset and lose interest towards the job conditions and issue
lower working hours, while increasing the prices on the production of goods.
Then this would result with many workers being unemployed and suffer with the
loss of money.

As expressed, I feel strongly that
the minimum wage increased to 14 dollars as of the beginning of this year was
not a good delivery towards the economy. We need more jobs, we need citizens to
work in the same safe working environment as before, we need workers to not be
cut on their working hours, we need workers to have paid breaks and we need
Canadians to not lose their jobs. I’m not against the idea of the minimum wage
being increased, I’m just against the idea of the minimum wage being increased
with a huge increment. In addition, the provincial government of Ontario is
proposing a 15-dollar minimum wage increase by the start of 2019 so this may have
a greater negative impact for businesses than it is now. But what can we do to
solve this issue? I believe that Ontario should consider using the model that
some U.S. states use that allows minimum wages to be determined by the city
level. For example, SeaTac, Washington; San Jose, California; and Santa Fe, New
Mexico all have their own minimums (White, 2018). A TD report states that the
minimum wage in Toronto of 15 dollars would be suitable for a standard income,
whereas, in Windsor the minimum wage should be 11-12 dollars. Increasing the
minimum wage plays a great role with economic growth, but what matters the most
is how much you increase it by so that it doesn’t result with a dramatic impact
on the economy (Alini, 2018).

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