On January 1, 2018, the provincial government of Ontario, headed by the Liberal Party of Canada, increased the minimum wage by 21 per cent; going from $11.60 to a staggering $14 per hour. Shortly after, Tim Hortons franchisee owners announced they will be rolling back benefits for all their employees, because of the wage rise. This prompted boycotts and protests across the country, including chants like “Hold the sugar, hold the cream, Tim Horton’s don’t be mean.”
According to an article by The Globe and Mail published on the same day as the announcement of the minimum-wage increase, small business owners voiced their concerns about how this will impact their operating costs. One of the business owners interviewed explained that they will have no choice but to pass down the cost to the consumer, as the new minimum wage will increase their labour costs, and thus, reducing their net profit.
However, workers and protestors argue that this wage increase is long overdue, as described in an article by Jacqueline Hansen for the CBC news. “Even still, campaigns for a living wage say $15 falls short in many Canadian cities. According to Living Wage Canada, a living hourly wage in Toronto would be $18.52.”
Much rhetoric focuses solely on the economic impact and burden of the minimum wage increase, but seldom on the social implications. The Medium sat down with sociology professor Kristin Plys, whose research specialization encompass political economy and labour movements, to investigate the purpose and motivations of minimum wage.
Professor Plys currently teaches second-year globalization and a fourth year sociology seminar on race, class, and gender.
“The minimum wage dates back to struggles that happened in the 19th and early 20th centuries,” Plys said, “Workers formed labour unions in order to restrict not only the amount of work that can be done in a day. Some factories had workers working up to 20 hours a day at a time. We owe the 9-to-5 and five-day work week to the history of labour struggle across the globe.”
The sociology professor expanded on the purpose of the minimum wage in an economic and historical context: “I think you can trace a lot of the current issues with the minimum wage to what happened in the 1970s. What happened was that there was a stagflation crisis where there was stagnant economic growth in the global north, along with inflation. What a lot of elected officials did to overcome this stagnant period of economic growth is to raise inflation, which made people’s salaries and wages worth a lot less.”
According to Plys, it is important to note the different sides of this debate: the workers and the business owners. “To be really frank, there is sort of a cruelty to say well, you’ve been waiting four decades for an increase in the minimum wage commensurate to inflation, wait longer,” she said, “If we think about this in the shorter term, it might seem like a big jump. The increases we’ve seen in the recent years are quite the drop in the bucket in the longer run decline of wages over time.”
According to The Globe and Mail, critics of the wage rise, mainly small business owners, explain that a smaller incremental rise in the minimum wage would have been a better choice. In the article, a small-business owner states he cannot afford to pay all his workers the 20.7 per cent raise in wages all at once.
Upon questioning if the recent minimum wage raise could have been implemented better, such as through a gradual incremental increase, Plys replied: “Part of the way in which a lot of service-sector businesses and industrial work has been able to get a marginal amount of profit […] is by squeezing labour and keeping wages low. So, from the business perspective, certainly, a gradual incremental increase in wages would be ideal if one were to raise wages. But for people who are reliant on minimum wage income, this kind of social compact is decades in the making.”
Since Tim Horton’s has announced it will be rolling back on benefits offered to its employees, the corporation received a backlash from protestors for not caring about its workers, only their bottom line. “It’s not like Tim Horton’s is at a risk of going out of business if its giving workers a living wage with benefits, it’s more about [how] Tim Horton’s wants a certain high level of profit.”
The sociology professor concluded the interview by posing a poignant economic dilemma at the heart of the minimum wage debate: “We have to determine, as a society, how much do the benefits of economic activity go to labour and how much should go to the owners and businesses?”