Examining the minimum wage

The cost of living is different for every city, so making a provincial level for minimum wage can be difficult — and residents, students and workers are feeling the pressure.

According to Tammy Schirle, an associate professor of economics at Wilfrid Laurier University, minimum wage is based off the cost of living for a family of four. If two parents worked at a certain dollar amount an hour, they would be able to achieve what would be considered a “good” standard of living.

She explained raising the minimum wage will not be the most efficient way to mend problems across the board as it would not benefit all parties.

“Raising the minimum wage is a very blunt policy instrument to try and achieve a goal of raising people’s standard of living, which can be done in other ways more effectively and in a way that doesn’t have the same negative effects like minimum wage does,” she said.

These negative effects, Schirle explained, may involve small businesses being unable to afford their labour costs with higher wages. If minimum wage is raised, small businesses will be less likely to lay people off, but also less likely to hire many people. It can also affect the job experience younger people have.

“With higher minimum wage, young people might be getting better jobs and more stable jobs, but they’re going to be unemployed a lot longer trying to find them,” she said.

“There’s a trade off there, unfortunately.”

To fix the conundrum, Schirle suggested people look to other individual policies rather than the entire demographic. The Canada child tax benefit can help low-income families take care of their children, while the working income tax benefit could be expanded without affecting the employer by helping low-income individuals.

However with these policies, students are the odd ones out.

“Well, who’s left out then? It’s the students, who are often struggling to pay their own bills and pay their schooling and everything else, but that’s where we tend to look at the student loans system,” Schirle explained.

She went on to say that Ontario is “pretty generous” with bursaries for low-income students, but if students have a lack of money to pay for comfortable living, the solution may be in expanding the loans rather than the general policies that raise minimum wage for everyone.

“If we’re looking for a broader ‘let’s make sure people have a minimum standard of living,’ target people instead of wasting money on handing everyone some cash. Target people that need it the most.”

Laurina Mahendran is a fourth-year business student at Laurier, who works 35 hours a week at minimum wage while taking three classes. She explained OSAP “only covers so much,” and for her to cover the rest of her living expenses she needed a form of income.

“It’s low,” Mahendran said.

“People who make minimum wage, it’s like nothing. Especially dealing with food and stuff — it’s a lot of work.”

Mahendran worries she will end up back in a minimum wage job after she graduates. She explained that with the amount of qualifications graduates need, it’s harder to find a field occupation and battle with job cuts.

“There are so many qualifications people need and everyone’s looking for experience, but when you’re in school, you can’t get all the experience you want or need.”

Schirle is confident students with a university education are not the ones that need to be worried about the post-graduate search for work. She says students may end up in minimum wage jobs for a bit after graduation, but many find stable jobs in related fields.

“When we’re worried about minimum wage workers in the long run, we’re typically worried about high school students or those that didn’t finish high school. They’re the one that kind of get stuck at the minimum wage [level], working in clerical jobs, sales, retail for the rest of their lives,” she explained.

“University students, it’s a tough run out of the gate and it’s hard when you first start, but in the longer run we don’t need to worry about them as much.”