Research on the Change of Minimum Wage in Ontario

ABSTRACT The economic consumption of this research paper is to hit the books the nominal enlist in Ontario based on the current minimal rent is $10. 25 in Ontario. The borderline employ mainly happens to the unemployed women and the young. The research on the stripped earnings brush aside permit passel to contribute to the watchword about the ongoing marginal pursue policies in Ontario and the relevant impacts of raising the tokenish wage in this responsibility. This research paper leave alone be divided into three separates. Firstly, this research paper will represent the introduction to the writing signifi tail assemblyce.Secondly, this paper will hit the books the change of minimum wage in Ontario, which also be divided into third sub-parts. In the first place, this paper will close in the theoretical framework. In the second place, this paper will introduce the general situation on the change of minimum wage in Ontario. Next, this paper will analyze the imp ortance of minimum wage in the labor markets. And a conclusion will be make in the end. Research on the stripped-down engross in Ontario 1. IntroductionThe minimum wage is generally considered as a controversial policy alikel1. The minimum wage is one of potentially useful tool for redistribution of accessible wealth because it can accession the wages of low skilled workers2. However, other factors of production may perplex the expense for the attach of low skilled workers wage, such as the wages of higher skilled workers and capital. Therefore, it is inborn to analyze how the minimum wage becomes $10. 25 today and the impacts of the change of it.The purpose of this research paper is to analyze the minimum wage in Ontario, which can provide a chance for people to contribute to the discussion about the ongoing minimum wage policies in Ontario and the relevant impacts of raising the minimum wage in this province. Meanwhile, the change of minimum wage in Ontario can be influe nced by well-nigh factors. 2. The Analyses of the channelize of nominal lucre in Ontario In labor economics, the minimum wage is often analyzed in a competitive labor market model and a model in which the employers are granted with whatsoever degree of monopsony power. 1. The Theoretical Framework on Minimum WageThe competitive labor market model involves the engage side and supply side. The postulate side refers to the demand of labors of all the firms in the market. The supply side can illustrate that firms in the market excite to pay higher wages to attract and retain workers. In the graph of competitive labor market model, there are the market supply curve and the demand curve, and these two curves have a cross point, which can be considered as the equilibrium wage rate. When a minimum wage is introduced in a competitive labor market, the step-down of employment will blaspheme on the steepness of the labor demand curve.Meanwhile, the decrease in employment will lead to the extend in the wage rate in the competitive labor market3. 2. The General Situation on the Change of Minimum Wage in Ontario In 1991, the then current level of minimum wage in Ontario was $5. 40 per hour4 and the relevant authorities and governments in Ontario proposed that the minimum wage in Ontario should be raised to a level of 60 percent of the average Ontario wage by 1995, which made Ontario become the province with the highest minimum wage level in Canada5.However, during the period from 1995 to 2002, imputable to conservatives in office in Ontario, the minimum wage did not increase6. Theoretically, all the people in Ontario may suffer minimum wage. However, in practice, most of people suffering minimum wage are low skilled individuals holding low-paying jobs7, including students, liquor servers, homeworkers, etc. Whats worse, in Ontario, the minimum wages of students liquor servers and homeworkers are less than general minimum wage. For example, the minimum wage of liqu or servers is about $1. 00 per hour less than general minimum wage.Over the past two decade years, some significant changes of minimum wage have happened to Ontario. Firstly, the liberal government raised the minimum wage from $6. 85 per hour in 2003 to $8. 00 per hour in 2007. Meanwhile, the Ontario Employment Standards Acts became effective in March, 2010, which regulates that the general minimum wage in Ontario is $ 10. 25 per hour. Nominally, the minimum wage increased by 50% from 1995 to 2010, but due to the increase of the value level and appreciation of dollar, the veritable value of the minimum wage just raised by 10% during this period. According toReid, the nominal minimum wage between 2007 and 2010 increased 28% from $8. 00 to $10. 25, however, due to the increase of price level, the real minimum wage increased by 23% during this period. As a result, from the above analysis, it is reasonable to gain the conclusion that the nominal minimum wage in Ontario increased to l arger extent, however, the real increase of minimum wage in Ontario was not significant. 3. The Impacts of the Change of Minimum Wage in Ontario This part will analyze the employment effects and the distributional effects of the change of the minimum wage in Ontario analyzed in the prior part.There are some discussions on the employment effects of minimum wage. about people hold the opinions that minimum wage has a negative impact on employment, but other people think that there is little impact on employment impact. According to this paper, there is so a negative impact of the increase of minimum wage on the employment. Canadian evidence can prove that a 10% increase in the minimum wage probably lead to the reduction of the employment of students by 3%-6%8. On the contrary, the effects on the young adults are slight.Since the Ontario is the province with the highest minimum wage in Canada, the adverse employment effects have been exacerbated. Whats worse, the unemployment rate ha s risen due to the increase of minimum wage in Ontario9. Moreover, the relationship between minimum wages and poverty is too vague. For example, the people suffering minimum wage are always very poor and due to the minimum wage, the wealthy gap between the poor and the mysterious become larger and larger. However, due to the increase of minimum wage, some of social wealth has been transformed to the poor to realize the redistribution of social wealth10. . Comparability to other province Minimum wages are diverse among different province in Canada. British Columbias minimum wage is $10. 25 that is the same as Ontarios and Alberta is $9. 75 that is lower than Ontarios11. The unemployment rate of Ontatio is 7. 8 , British Columbias is 6. 7 and Albertas is 4. 6. 12 This evidence might lead to that lower minimum wage plays a role in the low unemployment rate in Alberta. But since the minimum wage in Ontario is the same as British Columbias, the unemployment is different though. The effe ct of minimum wage on uneployment is ambuglous. . Conclusion In conclusion, lower-skilled people in Ontario, including the students, homeworkers and liquor servers, are suffering minimum wage and even, their minimum wage level is less than general minimum wage level. Since 1990s, there have been some regular and significant nominal changes happening to minimum wage in Ontario. However, in fact, due to the increase of price level and appreciation of dollar, the increase of minimum wage in Ontario is not significant. Meanwhile, the changes of minimum wage have some effects on employment and redistribution of social wealth.Although the increase of minimum wage in Ontario may increase unemployment rate, it can realize the redistribution of social wealth to narrow the wealthy gap between the rich and the poor. Bibliography Cousineau Jean-Michel, Tessier David and Vaillancourt. 1992. The Impact of the Ontarian Minimum Wage on the Unemployment of Women and The Young in Ontario. industrial relations 47(3), 559-566. Gunderson, Morley. 2007, Minimum wages Issues And Options for Ontario. Ontario Ontario Ministry of Finance. cited on Feb. 28th, 2013. Available from World Wide Web http//keqianxu. okee. com/1306641. html. Lee David, and Saez Emmanuel. 2008. optimal Minimum Wage form _or_ system of government in Competitive dig Markets. NBER Working Series of National role of Economic Research. No. 14320. Reid Frank. 2012. Monopsony in the Labour Market and Minimum Wages. Department of Economics and Centre for Industrial Relations& Human Resources. Shannon Michael, and bound Charles. 1995. Distributional Employment Effects of Ontario Minimum-Wage Proposals A Microdata Approach. Canadian Public Policy 21 (3), 284-303. Susan Munroe. 2013. Minimum Wage inCanada.Available from About. com Statistics Canada, Labour Force Survey. 2013. Annual Average Unemployment Rate Canada and Province. Available from Government of Newfoundland and Labrador website . 1 Lee David, and Saez Emmanuel. 2008. Optimal Minimum Wage Policy in Competitive Labor Markets. NBER Working Series of National Bureau of Economic Research. No. 14320 2 Lee David, and Saez Emmanuel. 2008. Optimal Minimum Wage Policy in Competitive Labor Markets. NBER Working Series of National Bureau of Economic Research. No. 14320. 3 Reid Frank. 2012.Monopsony in the Labour Market and Minimum Wages. Department of Economics and Centre for Industrial Relations& Human Resources. 4 Cousineau Jean-Michel, Tessier David and Vaillancourt. 1992. The Impact of the Ontarian Minimum Wage on the Unemployment of Women and The Young in Ontario. Industrial Relations 47(3), 559-566. 5 Shannon Michael, and Beach Charles. 1995. Distributional Employment Effects of Ontario Minimum-Wage Proposals A Microdata Approach. Canadian Public Policy 21 (3), 284-303. 6 Reid Frank. 2012. Monopsony in the Labour Market and Minimum Wages.Department of Economics and Centre for Industrial Relations& Human Resources. 7 Cousineau Jean-Mic hel, Tessier David and Vaillancourt. 1992. The Impact of the Ontarian Minimum Wage on the Unemployment of Women and The Young in Ontario. Industrial Relations 47(3), 559-566. 8 Gunderson, Morley. 2007, Minimum Wages Issues And Options for Ontario. Ontario Ontario Ministry of Finance. cited on Feb. 28th, 2013. Available from World Wide Web http//keqianxu. bokee. com/1306641. html. 9 Gunderson, Morley. 2007, Minimum Wages Issues And Options for Ontario.Ontario Ontario Ministry of Finance. cited on Feb. 28th, 2013. Available from World Wide Web http//keqianxu. bokee. com/1306641. html. 10 Lee David, and Saez Emmanuel. 2008. Optimal Minimum Wage Policy in Competitive Labor Markets. NBER Working Series of National Bureau of Economic Research. No. 14320. 11Susan Munroe. 2013. Minimum Wage in Canada. Available from About. com 12 Statistics Canada, Labour Force Survey. 2013. Annual Average Unemployment Rate Canada and Province. Available from Government of Newfoundland and Labrador website .