Ontario, Canada's most populated province saw an in increase in minimum wage from $11.60 to $14. Ontario also happens to be Canada's most industrialized province so a beneficial or deteriorating effect to the economy is going to have an impact on the entire country. This move was made to stimulate the economy by allowing more money in the hands of poorest. However, with increased wages the price of goods and services also go up so we can't be quite sure that this will help decrease the inequality between the rich and the poor. With increased living costs in Ontario, most people earning minimum wage are near the poverty line, I'd be interested to see if this works out for the better or for worse.
http://www.cbc.ca/news/business/minimum-wage-experiment-1.4473095
4 comments:
This is definitely an an interesting article. I thought there would be more an effect on prices, but economists say that the effects on prices are pretty small. I wonder if there would be an effect on unemployment rate.
That is a pretty significant wage jump. I guess only time will tell if the wage increase is larger than the corresponding increase in inflation. I'm curious if this does help stimulate the economy if other provinces in Canada will also increase their minimum wage.
I wonder if helping people to be a little above the poverty line is enough. I think strategies like these are more helpful to the politicians than the people living in poverty.
The increase in minimum wages would definitely benefit those people who earn minimum wages. I don’t think it would decrease the demand of labor because most of the jobs offers higher than the minimum wage. I guess this is not due to the inflation, but something else. If the inflation caused living costs increase, the increase in minimum wage would not only happen in Ontario but also other provinces.
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