Does Minimum Wage Hikes Equal Higher Unemployment for Canadians?

Before discussing the effects of minimum wage, here’s a basic explanation of what the term actually means. “The basic labour standard that sets the lowest wage rate an employer can pay to employees who are covered by the employment legislation is known as minimum wage. The main purpose to impose minimum wage is to protect non-unionized workers in unskilled jobs today.  In Canada, Employment legislation considers it an offense for any employers to pay covered workers less than minimum wage.”

Besides protecting Canadian employees from wage discrimination, what does the hike in minimum wages overtime mean for the Canadian employment market?  According to the Canadian Federation of Independent business (CFIB), increasing the minimum wage hurts minimum wage workers “by reducing the businesses’ capacity to hire and retain them. In fact, the CFIB predicts that a 10 per cent increase in the minimum wage would trigger up to 321,000 job losses.”¹ This statement does sound daunting for the many small businesses in Ontario, however history of minimum wage hikes shows that this in fact is not true.  Between the period of 2007 and 2010, Ontario has raised its minimum wage 4 times and the unemployment rates have stayed the same, and have even decreased – except for 2009 during the economic crisis.  Other provinces in Canada such as Quebec and Alberta have had similar experiences as well during the hike of minimum wages. 

Moreover, outside of Canada there are examples of how minimum wage hikes can actually increase productivity.  Seattle had victoriously increased their minimum wage to $15, imposing the highest minimum wage in the US.   Following its path, San Francisco is intending on increasing their minimum wage to $15 as well.  What does this mean for its workers? It means workers get paid for the hard work that they put in, and are not feeling as though the rich are getting richer, and the poor are getting poorer.  This means that for example, fast food establishments that are known for high turnover will have a more stable workforce.  “A major effect of raising pay checks for earners at the bottom of the wage scale is that these earners are likely to spend more of their income on local goods and service than higher-income earners. In turn, these households will increase patronage of area businesses, giving a boost to their community’s overall prosperity”²

Research conducted about minimum wage indicates how beneficial a hike in wage would be for workers. For small businesses that have to abide by the minimum wage hikes, keep in mind that this allows for retaining employees who are satisfied with their pay, and also provides a larger pool of skilled candidates looking for work – such as recent graduates.  Although these increases are not large, it is still considered a wage increase for minimum wage workers. Increasing minimum wage does not necessarily lead to higher unemployment rates, but rather it has little or no impact on unemployment – which is always a positive for the Canadian labour market.

Employment After Graduation

-Written for Linkus Group by John Kobrossy, HR Student

Being a new graduate is an exciting time in anyone’s life, it is a time of new beginnings. This new beginning comes with a lot of change and a lot of important decisions that need to be made. These decisions are influenced by many things such as fears or perceptions held about going into the real world. In a small sample group surveyed regarding obstacles new grads may encounter, or fear they will encounter, were the following:

• Too much competition or an over saturated job market
• No available job openings
• Not having the minimum relevant work experience required on job postings
• Ending up in a position that you won’t enjoy
• Only being able to find unpaid internships
• Not yet having all the skills needed to perform at a high level

Sometimes coming out of school and being lucky enough to land a job can be a relief and an opportunity that you do not need to think twice about. However, your first career decision does require some serious consideration.  You need to ask yourself whether or not a big brand name corporation is the best for you or whether you might be better off with a start-up company in your field? There are various factors when considering the best answer to this question. There is not one right answer for everyone; before making a final decision, it is important to consider it from all angles.

To begin with, the learning curve can be more flexible with a start-up. Unlike with larger corporations that can rely on their name and resources to supply them with a large candidate pool, a start-up is more likely to commit to you once they have made the decision to bring you on. . On the other hand, there are benefits to a big name company as well. In a larger corporation the reputation of the brand carries itself. You can clearly see the corporate hierarchy, and understand from the beginning how you fit into it. Your path of advancement is clearly drawn out for you if you stay with that company and because of its abundant resources; they are more capable of providing perks as you climb internally.  A start-up however, will train you and appreciate the advantages which you as an intern or entry-level employee afford them. Furthermore, an employee’s feeling of contribution can be greater in a start-up because you come in while the company is still building itself. You will be able to clearly notice the work you do and view the company’s success in direct relation to your efforts.

There are also a lot of personal development benefits to working for a larger corporation. In a larger organization, there are potentially more employees and a longer history; it is very possible that you may share an educational or career background with one of your new co-workers. This opens up the possibility for mentoring arrangements, because even without the shared experiences larger organizations possess the manpower to structure a mentoring program. Although it all depends on what you feel is most beneficial to you, in a start-up you can gain confidence and more significant experience. Within a start-up, rather than just having the resources to bring on interns for solely developmental purposes or even if you were brought on as a new hire, you would be put straight to work. You would build confidence through more autonomy, which in turn would give you meaningful experience because you would have to problem solve and rely on yourself. With a start-up company, rather than feeling that all your competency came from being micro-managed, you could be assured that you are actually capable of standing on your own two feet in your chosen profession.

Ultimately, there is a lot to consider when you are making your decisions after graduation. It goes without saying that hard work would be required in either scenario for success, what you have to consider is if you want to be part of something from the ground floor. Succeeding with a start-up can do wonders for your resume and your career; your achievements would stand alone and allow you to be recognized. In the end no one can make this decision but you and as long as you’re doing what you love you’ve made the right decision. After all, “Choose a job you love, and you will never have to work a day in your life.” ― Confucius

Helping You Invest in Human Capital

by Kassandra Wenaas, Marketing Coordinator Intern at Linkus Group

In today’s global world, investing in human capital often directly influences an organization’s productivity.  With a continuous rise in secondary education combined with rapid advancements in technology, there’s a growing demand for highly skilled talent to fill industry roles.