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The endless debate of a living wage

Barrie Examiner

9 December 2016

The issue of a “living wage”, especially for minimum-wage workers, is in the fore-front once again.  This isn’t an easy issue to resolve as it’s very much a question of balance.

If the minimum-wage is too low, workers have difficulty affording even the basic needs, let alone having a decent standard of living.  If the minimum wage is too high, employers may have to cut staff, withhold raises or withhold hiring additional staff.

It isn’t realistic to expect businesses to absorb the additional costs of wage increases, especially the small “Mom & Pop” businesses, which are often the first ones to cut staff if wage increases are too drastic.

Of course the minimum wage does have to go up eventually.  Employers can’t pay workers in 2016 the same wage that was paid in 1986.  An annual raise equal to inflation would seem reasonable; something the businesses can budget for in advance.

A big point that is generally forgotten is that minimum-wage jobs generally aren’t meant to be career jobs.

Sure, some certainly do find themselves stuck in minimum-wage jobs, but for most, minimum-wage jobs are something you do at the beginning of your working years to gain experience, put yourself through school, supplement your spouse’s higher wage, or supplement your retirement income.

Minimum-wage jobs are generally low-skill and don’t require a high level of education.  Sure, sometimes you do see university graduates working as coffee baristas, but that is usually due to other reasons.

As harsh as it is to say, if you find yourself still “stuck” in a minimum-wage job after 30 years, maybe you need to be honest with yourself and reflect on some of your life choices and what you did — or didn’t do — that make getting a minimum-wage job your only option.

 

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The above article was edited for space limitations.  Below is the unedited version of the article:

 

Once again the issue of a living wage is in the fore-front, with the City of Barrie now stating they want a Living Wage Canada Employer Certification to encourage private businesses to follow.  The city should proceed with caution on this idea as that is taxpayer’s money they will be spending.

Unlike the city, a private business must generate enough revenue to meet their payroll obligations, otherwise they have to cut pay or staff or close entirely.  The city only has to increase property taxes and other fees to pay their employees.

That said, the idea of a “living wage” is isn’t an easy question to answer as it’s very much a question of balance.

If the minimum-wage is too low, workers have difficulty affording even the basic needs, let alone having a decent standard of living.  If the minimum wage is too high, employers may have to cut staff, withhold raises or withhold hiring additional staff.

Some will argue that the businesses should absorb the additional costs associated with wage increases.  This isn’t realistic.  Although some think profit is a dirty word, profits allow a company to expand, both physically and in manpower, replace and update equipment, offer workers raises and yes, even pay owners and shareholders a dividend.

There are many who will argue that the shareholders of big companies are just rich, greedy buggers who don’t deserve any more money at the expense of the lowly public, yet forget that savings vehicles such as their RRSPs and RESPs are invested in some of those same “greedy corporations” and when those “greedy corporations” pay dividends, they see the value of their own investments go up.  Like most people I want my daughter to have lots of money in her RESP, given the high cost of post-secondary these days.

How about the small “Mom & Pop” businesses that can’t absorb any more expenses?  They will be the first ones to make drastic cuts, if  they don’t have to close their doors completely.

That said, more often than not, there should be more of a balance between what is good for the corporation and what is good for the workers, like allowing the workers some of that money in the form of profit-sharing programs or performance bonuses.

Of course the minimum wage does have to go up eventually.  Employers can’t pay workers in 2016 the same wage that was paid in 1986.  An annual raise equal to inflation would seem reasonable, but is that even required?  Should there really be such a thing as a “living wage” when it comes to minimum wage jobs?  A reasonable wage yes, but is a “living wage” a reality?

Raising the minimum wage can have unintended consequences on the labour market.  The added labour costs can result in employers cutting back on workers, their hours worked or not hiring additional staff.  Canadian research shows that a 10% increase in minimum wages leads, on average, to a 3% to 6% decline in youth employment.

A big point that is generally forgotten in the argument is that minimum-wage jobs generally aren’t meant to be career jobs.

Sure, some certainly do find themselves stuck in the cycle of minimum-wage jobs or simply choose to stay in them.  We certainly do need people to fill such jobs.

For most people, minimum-wage jobs are something you do at the beginning of your working years or when you’re re-entering the workforce after an absence, to put yourself through school to gain experience, a fill-in job when you’re between jobs in your profession, something that supplements your spouse’s higher wage, or something you do to supplement your retirement income.

An overwhelming majority aren’t the primary breadwinners in their household.  A majority (60.3%) are either teenagers or young adults, 86% of whom live with their parents or other relatives, while 19% are married with employed spouses.  Nearly all (90%) of those employed spouses earn more than minimum wage.

This also makes me wonder how many of the part-time minimum-wage City of Barrie employees are students or those who only want part-time, as opposed to those who are hoping to get a full-time position.  Do they really need a “living wage” at taxpayer’s expense?

This is in addition to the fact that minimum-wage jobs are generally low-skill jobs, which is why those without a high level of education or marketable job skills (or at least current skills) are frequently the ones you see in these jobs.  Sure, sometimes you do see university graduates working as coffee baristas, but that could be for other reasons.

As harsh as it is to say, if you find yourself still “stuck” in a minimum-wage job after 30 years, maybe you need to be honest with yourself and reflect on some of your life choices and what you did — or didn’t do — that make getting a minimum-wage job your only option. Maybe dropping out of school or not upgrading your education wasn’t such a good idea.

The reality today is that completed post-secondary education or a trade apprenticeship is vital to earning a decent living. Not only that, but a relevant and marketable education is also very important.

Before you sign up for that university or college program, you might want to find out your prospects of landing a job in that field. There’s no point in getting a degree in stick-figure drawing if there aren’t a lot of jobs out there for stick-figure drawing artists.  Otherwise, you may end up as the barista mentioned above.

Yes, a post-secondary education can be very expensive, but many people are able to overcome that problem without incurring a crippling level of student debt.  Teachers and parents have to impress upon youth the idea of getting creative in getting an education and paying for it.

McDonald’s recently announced a management training program in cooperation with Ontario community colleges.  After management trainees complete an in-house McDonald’s training program, they are given advanced standing for two years of a three year Business Administration diploma program.  All the management trainee needs to do is then attend a participating college for one year of in-class instruction and they are granted their diploma.

A McDonald’s manager makes more that minimum wage and that Business Administration diploma could serve you well in other jobs, including within the greater McDonald’s corporation.  There are many McDonald’s executives and franchise owners who started out flipping burgers for minimum wage.

That’s certainly something to think about.

 

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Another edited version that appeared in the Toronto Sun:

 

Toronto Sun
March 29, 2015

Barrie Advance
April, 2015

One of the arguments that is constantly given for raising the minimum wage is that it should be “a living wage”.  However, what is generally forgotten in the argument is if minimum-wage jobs are meant to be career jobs.

Sure, some certainly do find themselves stuck in the cycle of minimum wage jobs, but for most, minimum-wage jobs are something you do at the beginning of your working years or to put yourself through school, something that supplements your spouse’s higher wage, or something you do to supplement your retirement income.

As harsh as it is to say, if you find yourself still “stuck” in a minimum-wage job after 30 years, maybe you need to be honest with yourself and reflect on some of your life choices and what you did — or didn’t do — that make getting a minimum-wage job your only option. Maybe dropping out of school or not upgrading your education wasn’t such a good idea.

The reality today is that completed post-secondary education or a trade apprenticeship is vital to earning a decent living. Not only that, but a relevant and marketable education is also very  important.

Before you sign up for that university or college program, you might want to find out your prospects of landing a job in that field. There’s no point in getting a degree in stick-figure drawing if there aren’t a lot of jobs out there for stick-figure drawing artists.

Yes, a post-secondary education can be very expensive, but many people are able to overcome that problem without incurring a crippling level of student debt.

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The full version:

The issue of a “living wage”, especially for minimum-wage workers, is in the fore-front once again.  This isn’t an easy issue to resolve as it’s very much a question of balance.

If the minimum-wage is too low, workers have difficulty affording even the basic needs, let alone having a decent standard of living.  If the minimum wage is too high, employers may have to cut staff, withhold raises or hiring additional staff or raise prices to make up for the added cost.

How about the small “Mom & Pop” businesses that can’t absorb any more expenses?  They will be the first ones to make drastic cuts, or close their doors.

Of course the minimum wage does have to go up eventually.  Employers can’t pay workers in 2016 the same wage that was paid in 1986.  An annual raise equal to inflation would seem reasonable, but is that even required?  A reasonable wage should be paid, but is a “living wage” a reality?

A big point that is generally forgotten in the argument is that minimum-wage jobs generally aren’t meant to be career jobs.

Sure, some certainly do find themselves stuck in the cycle of minimum-wage jobs or simply choose to stay in them.  We certainly do need people to fill such jobs.

For most people, minimum-wage jobs are something you do at the beginning of your working years or when you’re re-entering the workforce after an absence, to put yourself through school to gain experience, a fill-in job when you’re between jobs in your profession, something that supplements your spouse’s higher wage, or something you do to supplement your retirement income.

This is in addition to the fact that minimum-wage jobs are generally low-skill jobs, which don’t require a high level of education.  Sure, sometimes you do see university graduates working as coffee baristas, but that could be for other reasons.

It’s harsh, but if you find yourself still “stuck” in a minimum-wage job after 30 years, maybe you need to be honest with yourself and reflect on some of your life choices and what you did — or didn’t do — that make getting a minimum-wage job your only option.

Today, a post-secondary education or a trade apprenticeship is vital to earning a decent living. Not only that, but a relevant and marketable education is also very important.  Yes it can be expensive, but there are options for those who look for them.

McDonald’s recently announced a management training program in cooperation with Ontario community colleges.  After management trainees complete an in-house McDonald’s training program, they are given advanced standing for two years of a three year Business Administration diploma program.  One year of in-class instruction at their chosen college and they earn their diploma.

A McDonald’s manager makes more that minimum wage and that Business Administration diploma could serve you well in other jobs, including within the greater McDonald’s corporation.  There are many McDonald’s executives and franchise owners who started out flipping burgers for minimum wage.

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Another version that appeared in the Barrie Advance:

Barrie Advance
February 13, 2007
As of Feb. 1, the minimum wage went up by 25 cents. Although I agree that certain pubic sector workers such as child care workers should be paid more money (most work for less than $10 an hour), there is much debate as to whether small businesses can afford to pay higher wages, such as the $10-an-hour figure floated by NDP Leader Howard Hampton.

 

I have met many great people who work in minimum-wage jobs, especially the waitresses at my favourite pub, and this is not meant to be a slam against any of them. I know they work hard and sometimes very long hours just to make ends meet.

We certainly do need people willing to work in the type of jobs that pay minimum (or slightly higher) wage. However, it is debatable as to whether these types of jobs should be thought of as career jobs as opposed to a stepping-stone to a higher paying job, an income that supplements your partner’s higher wage job or simply a job that puts you through school (to get that higher paying job).

Although I make a very good wage now, my first full-time job out of university paid $8.56 per hour. I only ever considered it a stepping-stone job, not one that I would stay at for 30 years.

Regardless, I feel there are other issues for those who feel trapped in minimum wage jobs to consider:

1) Are you qualified for any higher paying jobs?
2) Are there any employer- or government-sponsored skill upgrading or retraining programs for which you qualify?
3) Can you afford to go back to school on your own, either full-time or part-time, to upgrade or learn new job skills?

I could also ask if you are a high school dropout, which tends to lessen the chances of getting good paying jobs, but for some, that can be rubbing salt into the wound.

If you answered yes to any of these questions, have you tried taking advantage of these options?

Sometimes qualifying for high-paying jobs comes with a little sacrifice and hard work. If you answered no, that is unfortunate.

My 10-year-old daughter has decided that she wants to be a hairdresser (a noble profession) when she grows up. If she ultimately does want to pursue this profession, my wife and I will be encouraging her to get a post-secondary education in business administration (or similar) in addition to her stylist training.

Although hairstylists are not necessarily minimum wage workers (don’t even ask my wife how much she paid to get her hair done for our wedding day), that way, instead of just being one of the girls working in a salon, perhaps one day she could be the owner of the salon.

Now I realize that not every minimum wage worker could ever afford to have their own business. The start-up costs alone can sometimes be prohibitive. However, the point about having the right education and/or job skills can also enable you to move up the ladder with your current employer. You may be a waiter/store clerk now, but one day you could be promoted to manager. Maybe a competing retail business will steal you away because you have the job skills that they need. The possibilities could be endless……

About the author

Bruce Forsyth

Bruce Forsyth served in the Royal Canadian Navy Reserve for 13 years (1987-2000). He served with units in Toronto, Hamilton & Windsor and worked or trained at CFB Esquimalt, CFB Halifax, CFB Petawawa, CFB Kingston, CFB Toronto, Camp Borden, The Burwash Training Area and LFCA Training Centre Meaford.

Permanent link to this article: https://militarybruce.com/the-endless-debate-of-a-living-wage/

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