Increasing the Canadian minimum wage involves many issues. The research focuses on the necessity to increase the Canadian minimum wage. The research focuses on the advantages of increasing the minimum wage law. The current economic crisis has forced many companies to reduce operating expenses, including wage increases.
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Wage Increase Should not be Implemented
The minimum wage should not be increased. First, increasing the Canadian employees’ daily minimum wage per se may be disastrous to the Canadian community, the Canadian company, and especially the Canadian employees affected by the salary increase. The many Canadian companies will not be able to profitably implement the new round of minimum salary increases.
Increasing the salaries will entail the reduction of the company’s profits. The increase in salaries will translate to an increase in the total administrative expenses. The increase in the per day take home pay of the employee equates to an increase in the company’s marketing expenses.
The increase in the Canadian employees’ wage rates will trigger an increase in the Canadian company’s interest expense. Interest expense is the amount paid for borrowing additional funds to pay for the increase in the employees’ minimum.
The United States economic depression currently affects the Canadian business environment. Many companies in the United States have closed shop because of the economic depression. Stephen Slavin emphasized. The economic depression is characterised by the increase in the prices of basic goods and services. In turn, the increase in the prices of goods and services will result to the decrease in the company’s profits.
The continuing economic depression dragged many United States companies into the quagmire of unprofitability. Consequently, the United States companies were forced to file for bankruptcy. The bankruptcy state of many companies drove many of the American employees into the unemployment lines. Many Canadian companies export their finished products into the United States.
The current United States economic depression translates to a decline in the American people’s demand for the Canadian goods and services. A decline in the demand for Canadian goods and services would create an unfavorable timing for the Canadian employees’ salary increase.
Increasing the employee’s minimum take home pay will force many organisations to lessen the hiring of new workers. The increase in the salaries of the Canadian workers will force management to reduce some of its avoidable expenses.
Labor cost is one of the major variable labor expenses. A reduction of the labor expenses will translate to an offsetting increase of the Canadian companies’ net profit data. The rise in the minimum wage will surely force some companies to retrench some is employees. Usually, the managers will prefer to retrench temporary employees.
Next, the managers are forced to retrench employees assigned to redundant jobs. Specifically, management is forced to retrench in the production department during times of slow demand. The redundant employees will idle around because the decline in the demand for the Canadian company’s products will create a situation where the production quantity has declined significantly.
The rise in the minimum wage will reduce the current statistics in terms of applying for new jobs. The rise in the minimum wage will cause many Canadian companies to reduce their demand for new workers. As discussed above, the decline in the demand for the Canadian company’s products will cause many companies to reduce its demand for new workers. In times of economic depression, Canadian companies must tighten their economic belts to ride the tide of economic constraints.
The companies will have to reduce some of its variable expenses as well as fixed expenses in order to continue its current business until the economic depression fades away from the Canadian business community. The Canadian company can start opening its doors to new job applicants when the business wheel rolls faster than its current economic status.
The rise in the minimum wage will increase the unemployment ratio. The rise in the minimum wage will cause the retrenched employees to join the ranks of the unemployed. The lines of the unemployed will increase in length. The lines of the unemployed will double or even quadruple during times of economic difficulty. This is what is actually happening in the United States.
Many of the retrenched employees apply for jobs in other companies within the 50 states of the North American nation. However, the current economic depression forces the companies to close its human resource recruitment doors from the entry of new job applicants. The new job applicants will not be given the slimmest chance of being hired by the economically depressed companies.
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Jonathan Wadsworth opined the rise in the minimum wage will force many companies to increase their selling prices. The rise in the minimum wage will force companies to recover the rise in the minimum wage. The best way to recuperate the increase in the minimum wage is to pass on the difference between the current daily wage rate and the new daily wage rate to the companies’ clients.
Consequently, many of the clients are forced to reduce their want, need, or intention to buy the company’s products and services. The rise in the Canadian company’s selling prices will trigger a domino effect on the prices of other affected goods and services.
The rise in the minimum wage forces some companies to close down. A Canadian company that generates revenues that are lesser than the total amount of operating expenses shows an unfavorable picture of the company. The operating expenses include the both the marketing expenses and the administrative expenses.
The administrative expenses include the total expenses spent to pay for the office and other activities not related to the selling or marketing activities. The marketing expenses include the total amount paid to advertise the company’s products and services.
The rise in the minimum wage will trigger outsourcing. Outsourcing occurs when the Canadian companies hire another company from a third world country like India and China to perform the services of the Canadian employees. The most popular outsourcing jobs include call center services.
Here, the telephone operators located in the third world countries answer the phone calls of Canadian callers. Some of the Canadian clients will sense the phone operator speaks in unfamiliar or second language voice. The call center agent, usually stationed in India, is trained to answer the calls from the Canadian caller.
The Indian call center operator looks on a dashboard of possible answers to each question being thrown by the Canadian caller. In short, the Indian call center operator speaks in monotonous or repetitive terms.
Instead, the Canadian companies should be left on their own to increase or decrease their employees’ wages. This is the very essence of the laissez Faire economy. The companies are left on their own to decide when to increase the employees’ salaries. The companies may increase the salaries of their employees if the company’s finances will favorably call for such decision.
Some companies are encouraged to increase their employees’ salaries if the company generates a net profit. On the other hand, the companies generating a net loss are discouraged to increase their salaries.
As proof, many Canadian companies increased their wages to amounts that are higher than the prescribed minimum wage. Mr. Francis MacPhail3 emphasized the 1980s Canadian workplace was characterized as the employment and labour union activities; strong discussion of the current situation where the salaries are paid at different wage levels or rates. The wage levels are based on the company’s capacity to pay the wagers.
The wage levels are based on the worker’s job responsibility. In other companies, the wage levels are pegged on the employees’ length of service to the company. Normally, the wage levels are pegged on the employees’ academic status. In addition, some Canadian companies offer higher salaries compared to the competitors’ salaries in order to hire the competitors’ best talents.
During the1980s, the wage researches indicated there was a very important relationship between the company’s revenues and the increase in the employees’ wages.
The research focused on the importance of including the other factors that influence the ability of the company to increase the employees’ wages. The other factors include the employees’ current production or service performance in relation to the company’s preset benchmarks as well as net revenues.
Instead, the increases in the employees’ salaries should be based on the employees’ current performance. An employee who fails to reach the monthly benchmarks may be included in the list of possible employees lined up for retrenchment. Such employees will be penalized for their lackluster performances. The unworthy performance may force the company to retrain the affected employees.
In other instances, the company may transfer the employee to another job or department where the employee is more suited. To avoid this unfavorable scenario, the recruitment department should screen each applicant during the hiring process to determine if the selected job applicant can meet production and service benchmarks.
Ping Peng emphasised that salary increases should be on a case to case basis. For example, the Pay Equity Act in Ontario Canada was implemented as the world’s most progressive equal pay for equal work benchmark. Another wage rate research shows the diversity in the salary rates for both men and women in some sectors of the Canadian work environment. Many of the women continue to benefit from Ontario’s implementation of the approved pay equity law.
This clearly shows that the minimum wage should not be increased. The same act focuses on the increases in the men’s and women’s salaries within the Ontario community. According to the same author, there are many sensible and societal effects of salary researches around the world. The researches scrutinize the factors affecting gender pay discrepancies. The nation’s statute makers can learn from their personal successes and failures during the crafting and implementation of the Ontario Pay equity law.
The law makers will not produce any significant progress in decreasing the wage variance if they only depend on the workers to complain about the inequality in their take home wages. A proactive pay equity law, like the in Ontario Pay Equity Act, will force companies to focus more attention to reducing or eliminating gender pay discrimination policies.
The above act clearly shows that Ontario’s challenging endeavor with pay equity generates valuable lessons for different communities around the world.
In terms of the Ontario Pay Equity Act, the Act’s value lies in its research finding. Peter Dolton theorized there are some scholarly works that focus on scrutinizing the breakdown of the different pay methods implemented in the United Kingdom. There are a few jobs focusing on scrutinizing the effectiveness of the legal tenets of the same statute.
The organisation especialist, David Gray, insists the model focusing on fixed effects can maintain the employee’s hidden work behaviour. Mr. Gray’ research focuses on finding the variance among the model work outcome and the employees’ actual job output.
The research shows the salaries offered by companies will trigger the public interest for more job openings. Workers prefer to transfer to jobs with higher pay.
According to Raaj Tiagi, a handful of researches pointed to a Canadian community sector income gap between men and women. The extent of the variance has not been quantified in recent decades.
Another survey conducted shows that statistical figures from the Canadian Labour environment for 2008 indicated there is no discrimination in terms of wages between male and female workers in the public workplace. On the other hand, the salaries of the males are generally higher than the salaries of the females by an estimated five percent.
The pure wage premium or economic rent which the community workers who receive similar to their counterparts in the private sector is $1.00, or five percent for men and $3.15, or 20 per cent for women.
In addition, Richard Shearmur reiterated in lieu of increasing the minimum wage, the company should let the free labour market take its free course. Some of the Canadian workers migrate to other countries to search for higher job vacancies. Many of the current Canadian employees migrate from other countries.
Majority of the new employees migrate to Canada from third world countries. The migration is brought about by the foreign worker’s need to earn more money to send home.
The workers generally work in different fields of interest. The most popular jobs include nurses and other medical professionals. The professionals include engineers who work in building constructions, chartered accountants who work in business environments, and other professional jobs.
Tony Fang insists that the minority group members do not suffer from wage discrimination in Canada. This means that the minority group’s workers are happy with their current salary rate. Some of the minority group’s members receive performance bonuses and other perks for producing quality outputs.
In addition, the article discusses the minor differences in the wage rates of the employees in terms of gender among the Canadian minority groups. The article demonstrates critical gender differences. In terms of the minimum wage law, the disparity between the salaries of both males and females is not that clearly disadvantageous to the person with the lower salary.
In addition, Tony Fang emphasised the labour survey statistical data shows that
Labour wage increases occurred during different time periods when comparing the minimum wage increase dates of the different localities in Canada. The older workers felt very happy with the wage increases.
This is very understandable because the salary increases are generally granted to employees who have stayed with the company for many years. The new employees are left out of the minimum wage salary increase issue because the increase in the salaries is applied to regular or permanent workers.
Stephanie Luis theorized wage rates should be based on one’s skills or expertise. The study focusing on the cross-country comparison of the relation between wage rates and the skills or expertise between employees in the United States and Canada indicate variances in the returns to higher education between the two countries starting during the 1980s.
The research shows that there are variances in the salaries of workers. The difference is brought about by the difference in the expertise or skill of the workers. In addition, the salary of a Canadian office worker is normally higher than the salary of the same office worker in India.
In addition, the wages of employees who are members of labour unions are higher than the salaries of employees who are not members of labour unions. Likewise, the diversity in Canadian workers’ salaries is based on one’s educational attainment. Generally, persons with higher academic degrees have higher salaries compared to those with lower academic degrees.
In addition, Ryan Minor introduced his findings on the Canadian salary rates. He echoed what the majority of Canadians have felt. Inflation is a reality within the realms of the Canadian business climate. The current economic depression created a huge dent in the buoyant and comfortable business communities.
The communities include both the companies hiring the workers and the employees who are making a living by accomplishing their individual tasks and responsibilities. In addition, there are disparities in terms of wages in different parts of the Canadian nation. In effect, the inflation influenced many Canadian companies to increase their selling prices.
The increase in the companies’ selling prices triggered a corresponding increase in the purchase prices of raw materials used to craft the finished productions. The Canadian companies are forced to increase their selling prices in order to recuperate the cost of the salary increase in producing each inflation- affected products and services. The 1990s inflation forced companies to postpone their employee’s salary increases.
Raaj Tiagi also found in another research the occurrence of the disparity in the Canadian workforces’ wages. The disparities also occurred in a gender biased situation.
However, the disparity is negligible. The Canadian Labour Survey of 2008 indicated that both men and women were paid fairly in terms of their capacity and work output. The average wage of the male employees in the Canadian community is an estimated five percent higher than the average wage of the female Canadian employee.
David Gray espoused that different industries offer different wage rates to its Canadian workers. The workers from very profitable companies can afford to give higher salaries to its employees compared to workers working in small scale or financially tight companies.
Another finding of the study indicates the employees’ wages are pegged on the companies’ policy on salary increases. Some companies offer minimal wages especially during their start up or infancy stage because sales are still trickling into the company’s coffers.
The study shows some companies react immediate to the nation’s economic conditions. For example, the immediate reaction is to increase the workers’ salaries during times of economic plenty or profitability. In addition, employees will resign from a company that shows any sign of nearing the brink of bankruptcy.
Jason Allen insisted housing prices affect the wages of Canadian employees. Another research done in Canada between 1985 and 2005 focused on the prices of goods and services during different economic scenarios. The research findings indicate there is a positive relationship between home prices and the salaries of employees. City-specific variables such as union wage levels and the issuance of building permits are positively affected by current home prices.
Tony Fang theorised some of the employees belonging to the minority groups receive lower salaries compared employees in other sectors of the Canadian work environment. The study clearly discussed wage variances are minimal between the men and women among the minority sector of the Canadian work environment. Research shows minority women who are paid in terms of output pay earn more than the non-minority women.
Deborah Figart insisted the mathematical analysis of a living wage is a political act. “That act provides an illustration of the failures of the labor market to support the basic needs of a large number of men and women. The determination of income-adequate family budgets has a long history.
Living wage and family wage campaigns also have a long and sometimes checkered history The US Bureau of Labor Statistics (BLS) created its first family budget almost a century ago that early BLS computation found that a cotton mill worker required an annual income of $713 to provide a [fair] standard of living for a family of five”.
Built more than 40 years ago on a faulty methodological structure, poverty thresholds offered the policy standard that people use to determine if society has provided an adequate income for a family to live.
Every family has a living wage indicating poverty thresholds are not just a little wrong. For a family requires a yearly income that is two times the published poverty threshold numbers to be self-sufficient.
The current economic crisis force many companies to reduce operating expenses that including increasing wages. The economic depression enveloping the United States significantly influenced many Canadian companies to postpone salary increases. The increase in the basic salary may force some companies to retrench employees.
Many companies within the United States closed shop because of the current economic depression. The economic depression is characterised by the increase in the prices of basic goods and services. In turn, the increase in the prices of goods and services will lessen the average company’s profits.
The continuing economic depression dragged many United States companies into the quagmire of bankruptcy. The research discusses the necessity to increase the Canadian minimum wage. The research focuses on advantages of increasing the minimum wage law. Indeed, the Canadian minimum wage should not be increased.
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- Jonathan Wadsworth. Did the National Minimum Wage Affect UK Prices, Fiscal Studies, 31(2010): 81-120
- F. MacPhail,. “What Caused Earnings Inequality to Increase in Canada during the 1980s.” Cambridge Journal of Economics24, no. 2 (2000): 153-175.
- Ping Peng, Canada’s Bold Experiment with Pay Equity, Canadian Journal of Economics, 25 (2010):57-585
- Peter Dolton, The UK National Minimum Wage in Retrospect, Fiscal Studies, 31(2011):509 -534
- David Grady, The responsiveness of industry wages to low-frequency shocks in Canada. Canadian Journal of Economics.43(4): 1221-1242
- Raaj Tiagi, Public Sector Wage Premium in Canada: Evidence from Labour Force Survey. Labour. 24(2010): 456-473.
- Richard Shearmur, Where does all the talent flow?BN Migration of young graduates andnongraduates, Canada 1996-2001. The Canadian Geographer. 54 (2010):305-323
- Tony Fang, Immigration, Ethnic Wage Differentials and Output Pay in Canada. British Journal of Industrial Relations, Volume 48, Number 1, March 2010 , pp. 109-130(22)
- Stephen Luis. The Structure of Wages by Firm Size: A Comparison of Canada and theUSA. 23 (2009): 293-317
- Ryan Minor, Inflation regimes and the stability of the pass-through of wages to consumer prices in Canada, AppliedEconcomics,(41(2009):1003-1017
- Raaj Tiagi, Public Sector Wage Premium in Canada: Evidence from Labour Force Survey. Labour. 24(2010): 456-473.
- David Grady, The responsiveness of industry wages to low-frequency shocks in Canada. CanadianJournal of Economics. 43(4): 1221-1242
- Allen Jason,Source: Canadian city housing prices and urban market segmentation.Canadian Journal of Economics, 42 (2009) pp. 1132-1149
- Tony Fang, Minimum Wage Impacts on Older Workers: Longitudinal Estimates from CanadaBritish Journal of Industrial Relations. 47 (2009): 371-387
- Deborah Figart, Living Wage Movments.(New York:Routledge):51