Even More Research that Raising Minimum Wage is Good for Everyone

happy workers in a factory

Haters keep telling us that minimum wage is too high, which is really saying they would love free labour for private profits. Those haters are also not thinking about the economy at large. A new, massive, study on the impact of minimum wage concludes that minimum wage increases help people who aren’t currently being paid enough and that the benefits to that group cascade upwards on the economic ladder. Trickle down economics is a clear failure and trickle up economics looks rather effective!

The study is indeed impressive. Census researchers Kevin Rinz and John Voorheis used data from the bureau’s Annual Social and Economic Supplement, which surveys more than 75,000 households. The authors then link this data with administrative filings from the Social Security Administration on wages and track the changes between 1991 and 2013. The study stands out for covering such a large number of people over such an extended period.

“[R]aising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years,” the authors write. At the same time, there’s little indication that other people will lose their jobs as a result of the minimum wage—the outcome conservatives always warn about.

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Don’t Believe the Myths of Minimum Wage

Interview

2018 marked a minimum wage increase in Ontario which follows a trend throughout North America of raising the level minimum companies can pay workers. Large, heartless, corporations like Tim Hortons have released statements that they think paying people more is bad – they are wrong. It’s clearer than ever before: minimum wage increase have historically been good for the economy and people.

We have been raising the minimum wage for 78 years, and as a new study clearly reveals, 78 years of minimum-wage hikes have produced zero evidence of the “job-killing” consequences these headline writers want us to fear.

In a first-of-its-kind report, researchers at the National Employment Law Project pore over employment data from every federal increase since the minimum wage was first established, making “simple before-and-after comparisons of job-growth trends 12 months after each minimum-wage increase.”

What did the researchers find? The paper’s title says it all: “Raise Wages, Kill Jobs? Seven Decades of Historical Data Find No Correlation Between Minimum Wage Increases and Employment Levels.”

The results were clear. Of the nearly two dozen federal minimum-wage hikes since 1938, total year-over-year employment actually increased 68% of the time.

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A Living Wage Makes for a Good Business Plan

work and smile

Helmi Ansari started a successful business and understands what’s it like to worry about paying the bills – and knows that when you’re stressed about paying bills you’re not focussed at the job at hand. This is why he pays all of his employees a living wage. A living wage is usually higher than minimum wage (min. wage is basically your boss saying they wouldn’t pay you anything but the law says they must) and scales based on location and cost of living from year to year. Indeed, Ansari says he owes the success of his company to his committed employees.

He’s such a believer in living wage that he founded the Better Way Alliance to pressure the government and other companies to pay a living wage. The alliance has quite a few member companies already, including a business school and a brewery!

The message from this group of leaders is simple: being good is good for the bottom line.

“If our staff is focused on how they’re going to put food on the table and how they’re going to pay the hydro bill, they are not going to be really engaged in the business,” Ansari says.

His company, which employs a dozen people, became the first multi-site business in Ontario to pay a living wage — the hourly sum a worker needs to earn to support a family above the poverty line, given the actual costs of living in a specific area. Ansari pays all his Cambridge staff and contractors over $16.05 an hour, while the minimum rate for his Guelph employees is $16.50.

Ontario’s minimum wage is currently set at $11.40, a figure workers’ rights and anti-poverty activists like the Fight for $15 Coalition say is too low to keep families afloat. The Star has also profiled the impact of precarious work on issues like mental health.

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