NO TAX FOR INDIVIDUALS EARNING LESS THEN $45,000 A YEAR
NO TAX FOR INDIVIDUALS EARNING LESS THEN $45,000 A YEAR
Low minimum wage is one of the biggest impacts in the current economy and for the people earning that wage. As time changed and the economy of the country has developed prices of living has also gone up. To keep up with those higher prices it is necessary to be able to earn a certain amount. Low minimum wage is not that amount as it is not adequate for someone who is willing to keep up with the economy. (Merriam-Webster, 2018)In this review of literature is show how the low minimum wage is a significant issue in Canadian families. (Merriam-Webster, 2018) Throughout this review I will be focusing on who is impacted by this wage, what the government is doing, how can it be resolved, how can the earning be maximized along with pros and cons of increasing the minimum wage.
This is an issue in Canada because about 25% of Canadians are earning the minimum wage. (Canadian Dimension, 2018) This has an impact on people trying to pay for food, rent and bills to be able to live in Canada. The current minimum wage in Canada is $14 per hour, compared to last year’s which was $11.60 per hour. (Ontario, 2018) The current cost of living in Ontario is $2740.48, which means that an earning of $32,885 is required for a single young person to live. (Huffingtonpost, 2018)In Ontario, about one million individuals are working at a minimum wage which is about 10% of the population, up from 6% last year. (Statcan,2018) The people who are earning minimum wage is largely contributed by new immigrants and young teens/ adults.
There are several causes of the minimum wage being so low, one of the major ones go to political decisions. The reason the government is keeping it low is because it would raise the cost to almost all things which in fact will have people complaining more about the topic. (The Balance Careers, 2018) In addition, if a family with children immigrate newly into the country will not have any job experience here and will have to start to work with minimum wage, which will never be enough to provide food and shelter for the whole family. The reason for them not being able to find a job at a higher wage is due to the fact of having the lack of employability skills. Even if they have a lot of skill back home, the exact job might not be found and not all skills might be put to use.
To add on, there are many pros and cons on increasing the minimum wage, the Pros: it raises the bar of standard living for impoverished workers which means that more skilful employees in the job market, studies show gradual increase in wage has a lower impact on unemployment, “Additional income would be spent by consumers and would ripple through the economy if overall budgets for salary grew under a gradual increase in the minimum wage scenario.” (The Balance Careers), lowers gender- and race-based income inequality, which means that there would be less gender discrimination, more taxes for the government through payroll. The Cons: Companies with fixed budget could result in layoffs or slower hiring, this means that smaller companies will not be able to hire as many people or keep as much people as they would have to invest more money to have work done, fewer workers being hired for entry-level job, fewer employers would want to hire employees for easy jobs as they would have to pay more than before, could increase the number of high school dropouts, because students in high school would worry less to get a degree/ diploma and then a better job and work at a higher minimum wage and hope for increases as days pass, Prices on products might be increased due to higher labour costs. (The Balance Careers, 2018)
In reality, no one wants to work at the current minimum wage. It is almost impossible to live a luxurious life with minimum wage. Although if you were to live with it there are 6 relatively easy ways to maximize minimum wage earning
- Trade Duties
- Shop at discount stores
- Get creative with work commute
- Bring lunch/ snacks to work from home
- Have morning coffee at the office
- Use credit cards sparingly (Food Newsfeed, 2018)
A lot of companies cut down benefits for employees to keep costs low and be able to keep with the minimum wage increase. The problem for this is that employers cut down benefits and are not paying the employees while they are on break and for these many employees are not taking any break whatsoever causing them to be more tired and more annoyed of work. Instead of taking of benefits from employees, employers can reduce shift hours to lower cost or use eco-friendly equipment. Although, the investment can be higher at first but worth it on the long run. (Money Crashers, 2018)
Benefits are not the only thing that a company cuts down on to have a higher profit. Labour cost is also a key factor to look at when it comes to keeping costs down and achieving a higher profit. To keep labour costs low employers can:
- Review Levels of Compensation
- Reduce Employee Turnover
- Cross-Train Employees
- Trade Time Off for Payroll Expense
- Share Jobs Between Employees
- Convert Fixed Salaries and Wages Into Commissions or Fees
- Automate and Outsource Non-Critical Tasks (More Business, 2018)
For people at the poverty line, the government has implemented many public assistance programs including, federal unemployment insurance, Medicare and federal welfare programs. (Infoplease, 2018) The federal unemployment insurance is a program in which the government provides compensation to those who lost their jobs. (IRS, 2018) Medicare, also known as OHIP in Canada is a program where healthcare is provided for free, except certain cases like a dentist, and free prescription drugs to people who are under the age of 25 years old.
One way this problem can be resolved that will make people earning less than $45,000 be happy with their earnings is by removing taxes earned from their pay cheques or at least reduce the amount of tax that is being collected.