Andrea Horwath Promises Raise In Minimum Wage to $12

The NDP would raise the minimum wage to $12 over two years and tie it to inflation while trimming small business taxes to ease the hit on payrolls, party leader Andrea Horwath said Tuesday.

Campaigning for the June 12 election at a Tim Hortons ‎in the Jane and Finch neighbourhood, Horwath gabbed with people having their morning coffee ‎and said “a lot of folks are worried about jobs.”

While Leader Kathleen Wynne’s minority Liberal government is raising the minimum wage 75 cents to $11 hourly on June 1 and has proposed tying it to inflation, Horwath said she would go one better by raising it 50 cents in each of the next two years to $12.

To compensate for the strain on payrolls, the NDP leader promised to cut the small business tax rate to 3 percent from the current four over two years.
Source: thestar.com

Raising the minimum wage is quite a contested idea, no matter where it may be brought up. You will see facts and figures both promoting it and fighting against it. As you can see below community organizers and a handful of economists believe that a wage increase will put Ontario onto the “right economic track” while other economists strongly disagree.

Pro Statement

• The minimum wage has been frozen since 2010, yet unemployment, especially youth unemployment, remains stubbornly high — contradicting the theory that corporations will invest and that jobs will only increase when wages are lower. The Canadian Labour Congress has reported that corporations are sitting atop nearly $500 billion in unused funds thanks to generous tax cuts (a.k.a. corporate subsidies), instead of investing in job creation.

  Further, the price of gas, rent, groceries, hydro have all increased despite a minimum wage freeze.

Source: thestar.com

Anti Statement

• Minimum wages rise to $11 an hour on June 1 and some other budgetary proposals will increase labour costs, especially proposed Ontario pension plan for 2017, which will increase employer and employee payroll contributions to public retirement income plans by almost 40%.

  Such policies encourage firms to lay off workers and substitute capital for labour. Labour-intensive sectors such as trade will need to charge higher prices to offset increased labour costs, thereby encouraging consumers to shift demand to capital-intensive whose workers tend to be high-wage. The big winners in all this are capital owners and skilled labour with laid-off workers hurt most, not exactly conducive for income equality.

Source: business.financialpost.com