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January 3, 2018 | Working People

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

It’s been three whole days since the minimum wage soared in Ontario by 21%, to $14. Twelve months away, in the unlikely event Libs still rule the joint, it goes up another 7%. The lefties running Alberta have also pledged to raise the bar there to $15. The logic is that all ‘working people’ need enough income to get by, even when a job may require no skills, training, education or full-time commitment. It’s a way for politicians to try and create a universal income and get someone else to pay for it – like the poor guy running a donut shop.

You may have heard the story.

A couple of Ron Joyce’s kids (he’s the guy who took over Tim Horton’s from some old hockey player) are the new face of resistance. They own a few company franchises east of Toronto and this week told employees they’ll get less because the minimum wage is bloating. Fewer benefits. Less paid time off. No paid breaks. Here is the notice:

Mean-spirited? Maybe. But do we really want to be penalizing all the Tim Horton’s owners (most shops are independently-run small businesses) who collectively hire hundreds of thousands of young people for their fist jobs? What’s the point? So the kids can go and buy condos?

Meanwhile the Bank of Canada – the dudes who create money, set rates and worry about the economy – has just delivered a withering report on this minimum wage mess. The cost by 2019, it says, will be 60,000 fewer jobs, even while the people left working will be making a bit more. In addition, consumer prices (inflation) will be higher because of the wage increase, with the size of the economy shrinking by an equal amount.

So how many people are we talking about?

Across the country, 8% of the workforce is at minimum wage. Most of the jobs are entry-level, unskilled or part-time, but provide on-location training as well as that all-important asset of experience. Min-wage workers form the backbone of the food service industry, for example, where margins are often thin because of rising location rents and extended hours. Forcing a 29% increase in labour costs on small biz owners over two years is nothing short of extreme. There will be consequences, as the central bankers warn. Sixty thousand people will go from employed to unemployed. And prices rise.

Will existing workers who have been above minimum wage now expect increases? Are consumers, shouldering epic, historic levels of debt, willing to shell out more for their apple fritters, dry cleaning and groceries? Or will they buy less? Will more families like the Joyces nickel-and-dime their workers to recoup increased overhead? Do the lefties understand that on top of the $15 bosses must pay a 16-year-old who knows nothing there are employer CPP and EI premiums? Sometimes workplace insurance? Do you really want your basement-dwelling teenaged spawn to be replaced by a barcode-reading scanner?

Concurrently that same guy with the corner grocery store or the pizza joint owner who employs min-wage delivery kids can no longer (as of Sunday) split business income with a spouse – increasing his tax load. In a few weeks there may be more grief in the latest T2 budget, delivered by a millionaire finance minister with a billionaire wife – both of whom inherited money from family businesses (pensions and potatoes).

And what will be the predictable response on this pathetic blog? Probably more references to the injustice of the .001% who successfully run multi-national corps, making millions in compensation. The rich vs the rest. It’s the mantra of a failed crop of leaders whose policies have encouraged spending and debt while penalizing savings and investment. The politics of envy and division. The results are clear enough. Inflated houses. Extreme borrowing. Unrealistic expectations. And now, fewer entry jobs, higher prices, slower growth.

You do not build anyone up by tearing others down. Prove otherwise, and the Timbits are on me.

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January 3rd, 2018

Posted In: The Greater Fool

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