Managing Minimum Wage
By Lynne Bell
听
听听听听听听听听听听听 Recently, Saskatchewan's minimum wage increased from $10.50 an hour to $10.72 an hour. In this province, minimum wage adjustments occur annually. Any changes are announced by June 30 each year and take effect on October 1 of the same year.
听听听听听听听听听听听 This, says Saskatchewan's Labour Relations and Workplace Safety Minister, Don Morgan creates 鈥渁 predictable system for employees and business owners.鈥�
听听听听听听听听听听听 The province's legislation allows this yearly review of the minimum wage, which is based on changes to both the consumer price index and the average minimum wage.
听听听听听听听听听听听 Currently in Saskatchewan, there are just over 23,000 minimum wage earners. Just over half of them (56 per cent, according to the province's calculations) are under 25 years of age and they work mainly in retail, food services and other service industries.
听听听听听听听听听听听 Minimum wage is the lowest rate of pay per hour with which employers can legally compensate their workers.
听听听听听听听听听听听 Minister Morgan adds 鈥淚ncreases to the minimum wage, when combined with other supports and tax exemptions, help ease the financial burden for low income earners.鈥�
听听听听听听听听听听听 So why is there an ongoing debate regarding raising minimum wage-both in Saskatchewan and elsewhere?
听听听听听听听听听听听 Well, even though the benefit to minimum wage workers is obvious, there is some concern from the small-business sector regarding any increase in wages, however small it may be.
听听听听听听听听听听听 An increased minimum wage has the potential to not only make a difference in the life of the employee earning it, but also to their family and their community-including the businesses around them-as their spending power increases.
听听听听听听听听听听听 And presumably, an increase in minimum wage wouldn't have a noticeably adverse effect on multinational chains-where many minimum wage workers toil.
听听听听听听听听听听听 Currently, the mininum wage in Saskatchewan is still much lower than the $16 per hour proposed rate of pay, which is is considered to be a living wage in this province.
听听听听听听听听听听听 However, for small local businesses-especially in the current economic climate-an increase of any kind (and however gradually it is implemented) may mean the difference between a business听 staying open or shutting down shop-and potentially putting their minimum-wage earning employees into an even more precarious position.
听听听听听听听听听听听 So what's the answer?
听听听听听听听听听听听 听Well, one idea I encountered was the suggestion that employers of fewer than five staffers be allowed to claim a provincial business tax reduction to offset an increase in minimum wage, thereby creating a more equal playing field between large businesses (such as major chains) and smaller, independent operations.
听听听听听听听听听听听 The idea of increasing minimum wage-especially during the current economic downturn-is an ongoing argument that has supporters and detractors. However, ideas like this are the kind of creative thinking-and compromise- which may be necessary to ensure that both small business owners and their employees are not adversely impacted or pitted against each other during tough economic times.
听 听 听 听 听
Looking at minimum wage increases
By Kelly Running
听
听听听听听听听听听听听 Effective as of Oct. 1 was a minimum wage increase to $10.72 an hour.
听听听听听听听听听听听 鈥淚ncreases to the minimum wage, when combined with other supports and tax exemptions, help ease the financial burden from low-income earners,鈥� Labour Relations and Workplace Safety Minister Don Morgan said. 鈥淏y annually reviewing the minimum wage, we have created a predictable system for employees and business owners.鈥�
听听听听听听听听听听听 According to a press release there are approximately 23.200 minimum wage earners in Saskatchewan and the majority of these people are under the age of 25.
听听听听听听听听听听听 Canada in general, when compared to other first world countries, has a relatively low minimum wage. I remember travelling to Australia and being blown away by their minimum wage, which was around the $17 mark.
听听听听听听听听听听听 But, this meant subtle differences, especially in the food service industry, where in Canada it is typical to tip, while in Australia it is not common practice to tip servers. Relatives that I was staying with explained that because their minimum wage is so high in Australia that tipping servers was not customary.
听听听听听听听听听听听 When I first heard of the minimum wage increase, my thoughts went in a few different directions. I thought that it was good that those trying to earn a living on a minimum wage job would have the opportunity to earn a little bit more; but, then I thought about the small business that was struggling and what a wage increase would mean for them. In order to reach that minimum wage increase would they have to increase their pricing? Would they have to let someone go?
听听听听听听听听听听听 Small businesses have a profit margin that they need to achieve, but how much of an increase can they actually afford? It鈥檚 not that they don鈥檛 want to give their employees increased wages, it鈥檚 just that it might not be feasible for them to do so.
听听听听听听听听听听听 One question that I did come across, which made me think was this: 鈥淚s minimum wage a living wage?鈥�
听听听听听听听听听听听 When you look at the statistics of those that are making the minimum wage, you are looking at younger people who are just starting off in a job. Is it the job that they鈥檙e going to do for the rest of their lives? Probably not, it鈥檚 likely an entry-level position, and as they find success are given promotions and raises.
听听听听听听听听听听听 When I was in high school and university my summers were spent working at Clancy鈥檚 on the Beach at Lac Pelletier 鈥� I recommend the homemade burgers or Egg鈥檚 Clancy although everything is good 鈥� but as I went back each year, I worked hard for them, and in turn they showed their appreciation through raises. My last summer there, in 2011, I was up to $11 an hour and was told that my work ethic made my efforts around the restaurant worth it.
听听听听听听听听听听听 So, although it鈥檚 good to have a minimum wage set, what is the right number? Not everyone necessarily deserves an increase if they鈥檙e not pulling the same weight as another employee in the same position. It鈥檚 a way to reward those that are working hard for you as an employer.
听 听 听 听 听 听 However, I know that in Australia a higher minimum wage works for them, but I do remember thinking things were rather expensive there鈥� so, in the end, because minimum wage and cost of goods/services are related are we simply marking the numbers up but not really changing anything? If an employee makes more, but everything now costs more, are they really ahead?听
