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Benefits to minimum wage hikes

Cities across the United States, including Los Angeles, Seattle and New York, have adopted a $15 per hour minimum wage.
Becky Zimmer

Cities across the United States, including Los Angeles, Seattle and New York, have adopted a $15 per hour minimum wage.

Ontario is bringing the issue to the forefront of Canadian politics with a 21 per cent jump in minimum wage this year alone, going from $11.60 per hour to $14 per hour. Another increase, scheduled for Jan. 1, 2019, will increase it to $15 per hour.

This is a highly emotional issue that can raise fears including the loss of hours and benefits for workers and increase in prices for consumers.

Many say that this change is going to hurt small businesses.

However, an article by argues that not all of these fears are founded. Cities that have already increased minimum wage are seeing results that do not match these doom-and-gloom predictions.

American studies from the last two years are showing that raising the minimum wage to $15 per hour is either having no impact or is actually increasing employment rates.

A study from UC Berkeley Labor Center looked into increases Walmart has made –increases that give its workers a living wage of $12 per hour and puts its employees above the poverty line.

If Walmart chooses not to add these costs to its bottom line, deciding instead to increase prices on goods, the wage increase would result in an increase of a 1.1 per cent on prices. This would allow for increases of $1,670 to $6,500 per employee per year.

How much would that impact consumers?

“This works out to $0.46 per shopping trip, or $12.49 per year, for the average consumer who spends approximately $1,187 per year at Walmart,” according the study.

The study also noted that Walmart workers earn an estimated 12.4 percent less than retail workers as a whole, and 14.5 percent less than workers in large retail in general.

Too many working people today do not earn enough to cover basic necessities like rent, power and water.

At the heart of this debate is the fact that minimum wage is not a living wage, which, according on the website, “reflects what earners in a family need to bring home based on the actual costs of living in a specific community.”

The website calculated the living wage required to support a family of four in the Saskatchewan communities of Weyburn, Nipawin, Saskatoon and Regina.

Workers need to earn between $15.17 per hour and $16.95 per hour to qualify as earning a living wage in those communities.

The Saskatchewan minimum wage currently stands at $10.96 per hour.

When workers earn a living wage, the benefits go beyond giving them the ability to cover expenses. There are economic benefits as well.

Imagine if people could spend money on more than basic necessities, that they could go to that small business down the street and purchase something.

This would benefit all businesses.

And according to, small business specifically would see improvements.

“Why? Because, broadly speaking, low-wage workers are also consumers who will reinvest in their communities when they shop or go to restaurants.”

A higher wage means more people would be willing and able to shop instead of just spending money on bills or using credit cards. They become consumers of local businesses.

“The bottom line is that raising the minimum wage puts more money in ordinary people’s pockets and reduces inequality,” concludes the  article.

While the economic benefits that come with raising a minimum wage are important in themselves, what about the human aspects of business?

The economic divide between the rich and the poor is getting wider. And the longer we wait to increase the minimum wage, the worse it will get.

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