Ontario already feeling the pinch with the minimum wage hike

In my mathematical analysis of the wage hike, I claimed:

The minimum wage increase does nothing in relative terms, but increases everything in absolute terms.  It is pure, immediate inflation.

Anecdotally, within just the first few days of this legislation in effect, everyone has seen the immediate inflation in consumer prices, and if not, the immediate staff cuts made to compensate for it.

Many fast food chains have increased the cost of their promotional items, such as Subway’s Sub of the Day or Wendy’s Value Menu. Recreational facilities like movie theatres, pool halls and bowling alleys will need to rename their Toonie Tuesdays to Two-and-a-half Toonie Tuesdays. The lines at the grocery store are substantially longer as many of the staff have been let go.

Tim Hortons, Canada’s iconic coffee chain, made headlines. “Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say”:

I wasn’t marching down the street asking for this pay raise. Now I’m worse off

There are suggestions of customers boycotting Tim Hortons because of the cuts.  Customers are naively blaming Tim Hortons for this*.  For the franchise owners, it’s damned if you do, damned if you don’t. It’s either cuts in staff benefits or hikes in product pricing, both customer-angering moves that wouldn’t have been necessary had the government not intervened.  The mandatory wage hike made salary and benefits no longer negotiable between employer and employee. The decision once freely made by the interested parties is no longer free.  It has been overtaken by the government.

Already on day three of the new minimum wage we can see the so-called “economic plan” immediately backfiring. I stated before that the immediate inflation was not only for political expediency, but as a surreptitious way to increase tax revenue and reduce the debt they owe by making the absolute amount worth relatively less. Mandated wages were meant to increase income and sales tax revenue and keep property prices high, thus increasing property tax revenue as well.

It is likely we will see less tax revenue.  All the talk about reduced support for these businesses, either in protest, or merely because people can’t afford it after being laid off or having their saved purchasing power cut by one-third, looks to stall the economy immediately.  Businesses are now occupied trying to balance their books and dealing with the reduced efficiency of their capital. Small businesses are now less likely to grow, which results in even fewer future employment opportunities.

After writing my article, “Ontario’s $15 minimum wage is going to kill more than just jobs“, I really didn’t want to say “atodaso”.  But seems like after just three days, I’m well on my way to saying “I f***ing atoadaso”.

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* It should be noted that CBC commentators and in general, the Canadian public, haven’t done the math to realize that if executive and CEO pay is cut down to wage-earning levels and redistributed among the entry-level workers, it would boost entry-level pay by only $10-$100 per year, in other words an extra $1 per bi-weekly paycheque, since the ratio of top-level executives to workers is literally one to thousands at Tim Hortons.  It would be also foolish to punish those that are higher-skilled and carry more risk and responsibility through enforcement of outcome equity, thus removing the main incentives to start and maintain a business.  Nevertheless, Canada has been trending towards communism as of late so emotional pleas of “social justice and equity” and blind support of this destructive minimum wage bill are expected rather than critical thought.

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