Canadian Politics Today

How much does raising the minimum wage have in a macroeconomic sense?  I doubt the minimum-wage earner is a significant driver of things like inflation.  I think the notion that this will just drive prices up for everybody is greatly over-rated.  In places where minimum wages have risen, has any link to inflation ever been detected?

 -k

How much does raising the minimum wage have in a macroeconomic sense?  I doubt the minimum-wage earner is a significant driver of things like inflation.  I think the notion that this will just drive prices up for everybody is greatly over-rated.  In places where minimum wages have risen, has any link to inflation ever been detected?

Minimum wage affects almost all retail which affects a big portion of the CPI. Whether the effects will be measurable is an open question.

To all the people with the tiresome argument that we can raise the minimum wage because the rules of economics do not apply I have a question: why stop at 15$? Why not a 100$ minimum wage? Anyone who tries to answer that question honestly will be forced to concede that the rules of economics do apply and the only real argument is the negative consequences are not significant in some situations. But that leads to the question about what are the situations where the consequences small enough that we don't need to worry? Without knowing that we can't say that  any given minimum wage hike will have minimal harm.

Minimum wage affects almost all retail which affects a big portion of the CPI. Whether the effects will be measurable is an open question.

The hypothetical "basket of goods" is comprised of:

    FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
    HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
    APPAREL (men's shirts and sweaters, women's dresses, jewelry)
    TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
    MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
    RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
    EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
    OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

The salary of a minimum-wage cashier or sales-person is a negligibly small portion of most of these costs.

 -k

If the TH franchises suffer because their head office is being a dick, then perhaps their head office will have to stop being a dick.  Let's hope that happens.

The battle between the franchisees and the parent is not new: http://business.financialpost.com/news/retail-marketing/tim-hortons-franchisees-sue-corporate-parent-for-850m-alleging-bullying-and-intimidation

Tim Hortons franchisees sue corporate parent for $850M, alleging bullying and intimidation

Filed on Friday, it marks the second class action lawsuit from unhappy Tim Hortons store owners this year against their corporate parent

When discussing TH management it is important distinguish between the holding company and the franchisee owners.

How much does raising the minimum wage have in a macroeconomic sense?  I doubt the minimum-wage earner is a significant driver of things like inflation.  I think the notion that this will just drive prices up for everybody is greatly over-rated.  In places where minimum wages have risen, has any link to inflation ever been detected?

 -k

The average profit margin for the restaurant and retail trade in Canada is just 3.4%. Your costs don't have to rise very high before you're forced to raise prices.

I think the key factors to look at in the next 6-12 months are unemployment and inflation.

The effects are longer term. 6 month changes don't mean much. Most of the job loss will not come from specific people losing  their jobs but from businesses that don't expand or don't start in the first place and from automation that replaces new workers. I realize that everyone would like some definitive data that would settle this argument once and for all but I don't think we will ever get that.

Dear employees.  Much like the feudal lords with their serfs, we own you and therefore please follow the command of your betters and contact the government to say you are displeased with your higher wages.

Signed - the brilliant and entitled people who had the genius to own and operate a turnkey franchise.  That is all.

These people don't owe you a job, let alone a well-paid job. Why is it their responsibility that you don't have the skills to command higher wages? They should just willingly fork over a substantial portion of their profits to you? They can just close the place down and use their money on the stock market. They'd probably get a better return, in fact. If the wage increases cut too deeply into profits, then even if a place is profitable - a bit - they'll likely close. Why sacrifice a possible 8% profit margin somewhere else for a 1% profit margin now? I really don't know why anyone would own a restaurant, or for that matter, a grocery store, when the profit margins are so slim.