Tips

Tips are a ridiculous thing any how. It is absolutely out of control. Even the people that work in a beer store have a tip function on their debit machines. If I am in a restaraunt, and am provided with exceptional service, I will provide a tip for the good service that is above the call of the position. But dont expect to see a tip for simply doing the job you are paid to do, and that is the reason tips should NOT be tied into minimum wage.

Let us not forget

Let us not forget that the majority of businesses that use minimum wages are the very highly profitable corporate fast food chains.

Minimum wage laws hurt the people they are designed to help

Just as rent controls are great for existing tenants (at least in the short term) but not so great for future tenants, raising the minimum wage is great for those now making the minimum wage, as long as their employers keep them on at the higher rate. It is not so great for those looking to enter the job market, specifically young people under twenty five, whose unemployment rate is almost twice as high as for the general population.

Nobel Prize-winning economist Milton Friedman said that minimum wage laws hurt the very people that they are supposed to help.

He was right.

Sooke

Eliminating the Minimum Wage is a great way to accelerate the "Race to the Bottom". Imagine having the "Right" to offer your labour for less than minium wage, hundreads of thousands could be working for $3.00 per hour, unemployement would be history.
I imagine those generous employers would probably be willing to let you forego any benefits you qualify for too.

What a glorious vision for mankind that you and Milton Share! Not to Worry Sooke, I fear your dream will come true soon.

Here's a link to Friedman's quote.
http://beartotheright.blogspot.com/2006/01/minimum-wage-hurts-poor-people.html

Economics 101

Of course, if hundreds of thousands were working for $3.00 an hour and there was no unemployment, the laws of supply and demand would kick in, and wages would rise.

Instead of workers competing for jobs, employers would compete for workers - by raising wages.

Customer tips to subsidize restaurant industry

If the BC Liberals think restaurant customers should make up the difference in wages for people who serve alcohol, the gratuity should be automatically applied to the bill, be paid directly to the employee on their pay cheque, be taxed as income for the employee, and be claimed as a deduction by the customer on their tax return.

That would be fair to the employee, the tax payer, the establishment and the customer.

The employees wouldn't be penalized because of the sector they work in, the government wouldn't lose tax revenue on unclaimed income, the restaurant could go on paying lower wages which should help them adjust to any loss of business due to the new "tip tax," and the customer would have a clearly defined price they are expected to pay for their meal, as well as a nice deduction at tax time to compensate them for subsidizing an industry that provides employment for a lot of people.

groups of 8 or more ...

... are almost always required to pay an automatic gratuity of (usually) 15-17% - so that angle to the 'anti-' argument doesn't hold much water.

Sooke

You're dreaming in Technicolour if you believe Companies would compete for employees by raising wages.

If one employer can find employees to work for less than min wage, the rest will follow. Trickle down economics has long be proven to be nothing more than Corporate propoganda.

Relying on the 'good will' of employers to ensure I have a decent wage isn't the direction I wish to go. My Union ensures I'm treated fairly in the workplace, I'm grateful for them everyday.

Actually, I tip less for alcohol than food

So do a lot of other people. But why does it matter? Why this exception? Pettiness is why. That, and someone is a member of the Temperance League.

Sooke

Friedman existed in a world of theory and it looks like you do too. In what real world do you expect to get 0% unemployment ? Especially now with globalization.

Totally agree A Voice

I spent years working in restaurants and a cafe when I was in my 20s and I think tipping is ridiculous. What's funny is that some of my friends who have never worked in the food industry see nothing wrong with it. It's almost like a north American ego thing- "Look at me, I can afford to toss a tip your way because you'll never be decently paid like I am". Which is exactly where tipping comes from- the elite classes would toss coins onto the floors for servants and the low classes in the olden days.

Increasing the minimum wage

...does not hurt business, except in certain small businesses like sole-proprietorship companies such as used bookstores, one-off clothing stores, sushi restaurants etc. It doesn't hurt McDonalds or Wendy's at all - they still need the same number of people on shift in order to be able to make the daily sales, having already put in millions to draw and serve the customers. So increasing their wage bill only comes out of the franchiser's gross income, and the licencer's gross profits, both of whom can afford to take a hit in the interests of reducing inequity, raising the GINI, and forestalling the coming revolution so bravely predicted by Coyote et al.

I jest, but only a little. Most businesses, especially those over 50 people (which is the dividing line between small business and medium-sized business which produces the vast bulk of wealth in the province) have so much more invested in their capital, plant, advertising and production that raising the minimum wage on their lowest-paid employees each year by the tiny fraction of gross payroll required might only mean the difference between the owner having a couple of mai-tais at dinner on his annual vacation in the Bahamas, where instead she used to have a couple of bottles of Pol Roget. (See? I'm not sexist.)

This isn't me talking - this is the notorious economists Card & Krueger and their 1992 study and 1999 defense on wage rates and unemployment. There's still some disagreement over the measure of the tradeoff, but pretty much everyone agrees now that Friedmann was out to lunch on his mathematical treatment of wage-price agreement, and you can read substantial defenses by such Nobel-prize-winning luminaries as Krugman and Tobin which note that
monopsonistic competition such as exists today throughout much of the western world constitutes a substantial market failure of the free enterprise system.

The thing that everyone seems to have forgotten is that reducing the minimum wage below the rate that other businesses pay constitutes a direct subsidy to the business so benefitting. Most Fraser Institution lackeys are committed to ending market-destroying subsidies - it sorely puzzles me to see them twist double to insert their heads into nether regions in order to justify this subsidy, and ostensibly only for the benefit of those who are truly NOT their constituency - the poor.

Tell me again - why is the Fraser Institution looking out for employment rates of the poor? What do they care?

I read the same arguments made against Wilberforce and Newton when they tried to abolish slavery.

John Greg

"sooke said ...

"Instead of workers competing for jobs, employers would compete for workers - by raising wages."

Absolute, complete Libertarian myth making. Sheer doolally.

Absolutely bang-on - 100% accurate. This is the fallout from monopsonistic competition as mentioned above, where one buyer (the employer) faces many sellers (the labourers). And this situation is guaranteed permanently by the government's monetary policy which insists on keeping check on inflation (for good reason) by means of increasing the money supply through private channels, which ensures that there will always be a modest amount of structural and non-structural employment to ensure that wages do not force prices set by corporations too high.

There is, however, no subsequent limit on corporate profits, either through the money supply or anywhere else.

The deck is stacked against the poor. And nobody's telling 'em.

To those who tip not...

" Do not bind the mouths of the kine that tread the grain"
- Deuteronomy 25:4

ooops

Just noticed... that should be "a modest amount of structural and non-structural UNemployment"

Why shouldn't I?

Returns on capital are kept down through punitive taxation of capital gains, etc. Capital accumulation is also punished through government/central bank money-printing activities, resulting in interest rates being artificially low. The result is tremendous levels of personal debt, a constant need to borrow to buy a house or start a business and a great shortage of unencumbered capital.

I mean REAL capital, acquired the old-fashioned way through saving and investment resulting in productivity growth, not the ersatz printed-to-order & created-through-debt currency we are forced to use...

But LABOUR, especially low-skilled labour, is in great oversupply everywhere. However, it votes, whereas capital does not. The result is a system in which the formation of savings - of capital - is actively discouraged, while labour is protected. One of the ways governments try to do this is through the "minimum wage".

The sanctity of the contract, between two freely-consenting parties, is long dead in western countries. I am NOT free to hire someone at $3.00/hour, so marginal businesses needing to hire at under the minimum wage are stillborn, and no jobs are produced.

Pretending that minimum wages protect workers is true to the extent that highly-paid and/or unionized workers are shielded from downward pressure on their wages. Not surprising.

But it kills potential jobs for people willing to work for less.

In addition, whatever wage levels and conditions myself and my employer/employees agree should be no business of anyone else, should it?

Kreditanstalt, you need to

Kreditanstalt, you need to look around the world and see how it is working out for people who don't have minimum wage protection. Do you really believe Companies are doing mankind a favour when they pay less than a dollar a day for employees in their garment factories in India and Asia, I think they get 13 cents per hour.

I've met with miners in South America who get paid $3 per day for working underground, when they die or get killed at work, there are thousands more desperate people willing to take their jobs. Do they wish they had someone on their side to protect them, damn right they do!

It's everyone's business when people are being exploited. If you can't create jobs that pay at least minimum wage, you aren't really creating jobs at all, there is another name for that and I believe the US fought a civil war over that issue.

In short, people need to be protected from unethical employers and governments neither of whom can be trusted to care for people.

Kreditanstalt

Why on earth would you not be able to hire someone at $3.00 an hour. You only need to ask your $500.00 dollar an hour lawyer to draw up a contract which, in this province, can supercede labor laws and you have it. Many (non union) high end restaurants require their waiters to not only share a percentage of their tips with the rest of the staff, they also have a contract with the server in which the server (not deemed an employee) pay's management for the privilege of working in, and making tips in the establishment.

Discrimination once again rears its ugly head under the present governments misguided rule. To take any one sector of our population and single them out for special treatment, only for the good of a special interest group, is a practice that should never be allowed within a so called democratic country.

My special interest group would like to make a motion that we tax all those working within our province that have MBA's an extra 10% on their income which we could then return to their employers as a tax credit, thus making sure, that our august employers will hire more MBA's, keeping them out of the ranks of the cab drivers.

To be fair, let the minimum wage be equal, across the board and allow the individual businesses to claim tax credits for "proven" hardship caused by paying equal minimum wages.

Punitive taxation on CAPITAL GAINS????

You must be joking. But, it's not even an effective concern - most of the really BIG money isn't made in capital gains terms anyway.

Tax all earnings however made: Interest, Capital Gains, dividends, gambling, prostitution however.

Bring it all to the table and tax it progressively and you won't recognize this country in a decade.

Time for an end to the free ride that's left a tiny proportion of the population with the crust and most of the pie - while workers do the dirty dishes.

Anyone who's complaining about returns for capitalists is living in a looking glass world.

Do you have ANY idea how much 'capital' disappears every day (capital which could be used to do productive things) while money managers and traders on the world's stock markets play with themselves and pretend they're 'adding value'?

I don't think you want to go there - we haven't, Thank God, seen THAT kind of thinking here since CAPITALISM booked off.

Wages should be entirely negotiable...

In setting up a business, nobody jumps through all the hoops, risks capital, and contributes his or her time for the benefit of the hired help! Neither are companies charities, either...nor are they intended to "do mankind a favour". That's not why people go to the trouble. Without the profit motive, nobody would do it.

Someone working for 13 cents an hour or $3.00 a day? What did they do BEFORE those opportunities came along...? So what IS "exploitation"? Please define it carefully and objectively: isn't it what both labour and capital attempt to do to each other daily? Without both sides to an arrangement feeling they have some good of it, nothing would be ventured at all...

Would you be willing to pay more for things if you could be sure those producing them were paid Canadian-level wages?

We're already paying through the nose as a result of this kind of government attempt to limit profits and artificially raise wages... All government-imposed minimum wages have done is FORCE people to pay more - and thus lowered living standards for all. Instead, why not allow a free market in labour? Isn't CHOICE a basic human right, too?

(Or do you aim for a completely planned economy? In which case I'm afraid you're beyond hope...)

Kreditanstalt

You're missing the obvious.

Lowering wages means increasing the level of inequality. It means allowing increased levels of exploitation.

Increasing inequality means reducing a country's overall growth rate (from IMF Staff Discussion Note, April 8th, 2011).

In that article they say that's why poor countries with high levels of inequality have short growth spurts that peter out.

To maintain decent levels of growth beyond a few years a country needs to reduce its inequality.

Canada already has a high level of inequality and it hurts everyone. If our society were more equal we'd all be richer for it.

You say you don't know what exploitation means, well, if a man feels forced to sell his kidney or his daughter to a richer man, that's exploitation. You say that's two consenting adults coming together and making a contract. But that isn't the case because one side has no other option and you're the one after all claiming that we should be promoting "choice".

Minimum wages and other social supports promote choice. They allow people other options than sell an organ or their children. People need greater opportunities and the freedom to make better choices.

Getting rid of the minimum wage and other social supports reduces choice, reduces freedom and increases inequality and exploitation.

Kreditanstalt

Without accepting your first premises on capital and risk and return which I say are only partly correct from a limited point of view (and may return to debate if you have interest) I stop only to note that if you neglect capital for a month, nothing happens. But if you neglect labour for a month, it dies, usually of starvation.

Surely this is clear.

"In setting up a business, nobody jumps through all the hoops, risks capital, and contributes his or her time for the benefit of the hired help!"

Sure they do - not solely for the benefit, but certainly a part of the equation. It's called the cooperative. Perhaps you've heard of Vancity? Otter Co-op? Modo (Vancouver Auto Coop)? Housing is often done as a cooperative venture and employs people at fair wages in addition to providing housing.

This is another face of capitalism that nobody talks about - a genuine and remarkably fair one, compared to the ranting of some noisy buggers who insist that the only model to follow is a corporate model in which one or a few get all the profits, and distribute the risk to anyone stupid enough to indebt theimselves to a limited-liability company.

Too bad we have so little choice.

laugh out loud! Say's law revisited...

Savings does not equal capital.Even if all who were able to in the country saved every penny they could, not a thing would happen except less money in circulation.'Investment' may or may not be productive...

Business hires people because they require X number of people to do the work, and the businesses in my town will tell you that they are hurting because they have less sales, not because of minimum wage, which is a given. Do tell, where is the business that has people standing around doing nothing? In any event, the best thing we could do for business would be to a) peg the minimum wage higher, and mandate increases every year, to end all unsurety b) end all subsidies to all business, except a preferential tax rate for small business (because they employ the majority of people in BC) c)develop lending and loan guarantee prgrams (which are not subsidies) for small business, because it is dificult for true entrepreneurs to raise money. The old days of lending based on land, equipment, and capital are over, because business today is so radically different, and depends more on 'human capital' than any other factor. Which is why, of course, the most succesful businesses pay attention to paying their employees well, and concern themselves with the overall well-being and development of said employees - how could you otherwise build a business that works? And how else would you ensure that your community stays financially healthy? And where is the business that will be financially healthy in an impoverished community? Frank has already pointed out some of the ramifications to gross inequality.

It is just laughable to pretend that 'business' is special, and different somehow from 'people'. When I ran a business that was extremely labour intensive, I paid the highest wages and benefits I could afford, and increased them every year. First, the business could not function without happy, well-trained, and comitted staff.Second, in spite of labour costs that were 68% of gross (outrageous! said my banker), the business also had much lower then industry average costs, and much higher then industry average profits. Yes, good business exists for the hired help first and foremost if they want to find some of that 'risk premium' for themselves.

It is almost laughable that business thinks they ought to deserve some subsidy (lower minimum wage) because they are not bright enough to practise good business - almost laughable, because we have a government that gave it to them.

oops!

The above will be a tad more readable if one inserts 'than' instead of 'then' in front of 'industry average...' - in, ahem, two sentences.
I am in a bit of a hurry, sorry.

YES - In fact I do it ALL THE TIME

This was your question: "Would you be willing to pay more for things if you could be sure those producing them were paid Canadian-level wages?"

The answer is in italic bold above.

We need higher minimum wages and better social programs - not lowered taxation for folks who can afford to pay their way,

There is a cost to civilization you don't appear to be willing to pay.

Did you actually take the time to read the survey of academic literature on the subject? - here's the link for you -
http://www.epi.org/publications/entry/bp178/

Ideology

Kreditanstalt, your political idiology is what's wrong with this country.

Thank god for Unions and the NDP. Coyote, I hope the revolution you speak of comes soon.

This minimum wage exception reeks of discrimination

But so do many things in British Columbia. We seem to excel in discrimination. Revel in it, even. You can bet that none of the Liberal politican's kids work in the liquor-serving industry. Otherwise the minimum wage would be double.

Killing jobs

No one is going to fire workers because of the minimum wage because workers mske employers money. The Fraser Institute is an antiquated old bunch of dried out old conservatives, and conservatives don't have a clue about economics, just look at the economy now.
The more workers make, the more they can spend. Do you think the N American auto makers would have been in trouble if people had jobs and made a good wage. Those days are gone, and the conservatives can't understand why no one is buying anything anymore. What is their solution? Borrow more money and throw it away through government pork-barrel handouts. The debt level is too high, that is killing jobs, you dumbasses.

PRINT MONEY FASTER AND FASTER...!

71Norton: "The more workers make, the more they can spend."

Well, then, let's just raise the "minimum wage" to $500/hour and we can all be wealthy!!!

For the rest of you, "discrimination" and "exploitation" are part of LIFE. There is no way to reach some kind of socialist utopia in which everyone gains equality of outcome while disregarding the fact that life - and goods production - is inherently unequal.

The way one succeeds in life is to make finer, more accurate and more perspicacious distinctions than the next man.

But...that's "exploitation"...

Perspicacious distinctions?

There's a $10 word for "greed" for you...

I regret to inform you that among the richest of our land, the way one succeeds in life is by monopolizing a resource, a service or a product (whether or not you actually own it or invented it). Or you make your money by charging higher prices than simply the cost of production plus a reasonable profit. Or you limit your liability, sell shares to other investors who hope to get rich like you, but instead keep most of the shares in reserve and allot them to yourself when you feel like you've done a good job and need another ten-mill or whatever. Or you talk government into reducing its tax share of the resources you're extracting and selling offshore in return for a favour and a donation.

Then you use all the money you "earned" to bid higher the price of everything - land, housing, cars, gas, food, transportation - so that the rest are competing for a shrinking slice of the same resources.

Don't forget to mention that consumption is inherently unequal too.

kreditanstalt

Why you're all hung up on exploitation I don't know - back to the basics:

Monetarist economics acknowledges wages and prices move together and oppose inflation. however, they move at different rates. Keynes summarized this, Phillips expanded on it, and even Milton Friedman agreed.

What they all agreed on, as well, was that some things are easy to do - like raise the price of goods, especially in a large, segmented market with inelastic demand, such as food in most countries, or fuel in absolutely all of them. They also agreed that wages tended to be "sticky" - it wasn't always easy to raise wages (or lower them for that matter), and that was substantially due to the lack of bargaining power of the employee on the market. But Wikipedia says it better than I do:

One of the characteristics of a modern industrial economy is that workers do not encounter their employers in an atomized and perfect market. They operate in a complex combination of imperfect markets, monopolies, monopsonies, labor unions, and other institutions. In many cases, they may lack the bargaining power to act on their expectations, no matter how rational they are, or their perceptions, no matter how free of money illusion they are. It is not that high inflation causes low unemployment (as in Milton Friedman's theory) as much as vice-versa: Low unemployment raises worker bargaining power, allowing them to successfully push for higher nominal wages. To protect profits, employers raise prices...

In markets with perfect competition, competitive firms cannot simply raise prices. The influence of unemployment is only a small portion of a much larger inflation picture that includes prices of raw materials, intermediate goods, cost of raising capital, worker productivity, land, and other factors.

However, most of our markets do not have anything approaching perfect competition, nor are consumers perfectly informed. Hence, wage and price stickiness becomes a fact of life.

Part II

Governments since Friedman are convinced that allowing high inflation to take hold robs an economy of its purchasing power, and ultimately, wealth, and have decided that it is to our advantage to control inflation. Since inflation and employment move in inverse proportion, increasing inflation reduces employment. Hence, when the government controls for inflation, it induces unemployment. This makes government at least partly responsible for ameliorating the worst effects of unemployment. However, the rational cure - reducing wages - doesn't work in a competitive market for necessities of life at the lowest level. That's where the minimum wage comes in - to help protect against the worst effects of poverty, aimed primarily at those with the least bargaining power and the "stickiest" of wage scales.

Now, if you have a better way of addressing all this, we're all ears. But simply to dismiss the need for a minimum wage by saying:
"In addition, whatever wage levels and conditions myself and my employer/employees agree should be no business of anyone else, should it?"
...is disingenuous in the extreme.

Am I reading correctly?

zalm...so you think that governments should be able, through the force of their own laws ~ and the violence inherent with that ~ to interfere in transactions between individuals?

If I hire my neighbour or his son to mow my lawn for $5.00/hour, shouldn't that be solely the business of the two of us?

If I trade a few hours of my time for the services of my car mechanic neighbour...?

Suppose I rent premises and establish a carpentry & cabinet-making business, both to make myself a profit and to utilize the skills of two of my employees, who freely accept the contract full well knowing the working conditions and pay rate of $6.00/hour?

Who's being "exploited" here? And who takes it unto themselves to define what is, and is not, "exploitation"? Shouldn't the question of whether or not "profiteering" or "exploitation" is occurring be a matter between the parties concerned?

More important even than the argument that interference via "minimum wages" kills profits, the free contract ~ amicable transactions between consenting individuals ~ has died.

How anyone can justify the use or threat of violence to interfere in peoples' lives in this way - or ANY way - is, well, uncivilized.

Kreditanstalt - Frankly, NO

There's violence AND there's violence.

Frankly, the suggestion that someone with capital has the POWER to exploit his fellow human beings merely because he has that 'capital' is a VIOLENT notion...

Contracts, to be properly enforceable also must be fair and your world isn't.

We give up to the state the power to make decisions which are enforceable through law because we don't, as a society, care to live under the rules of jungle power.

That is what 'civilization' is all about.

In fact, the measure of a culture or a civilization is a measure of how it treats the weakest and most powerless…

Minimum wages do not kill profits - in fact, quite the contrary. However, I can't FORCE you to read the literature nor can I make you take the effort to understand it.

I can, however, ignore you.

When someone offers nothing sensible to a debate it's time to turn away from them and take up a 'serious' interlocutor.

Wage ing in

Try driving a logging truck; no minimum wage, driver pays any fines out of pocket ($$$), no wage unless the load crosses the scales. That Sucks when the truck breaks down for 3 days and the driver is expected to help make repairs with a mechanic who is getting paid (Logging truck drivers are exempt from BC;s employment standards act..

Minimum wage earners don't spend

My last job paid $11/hr, so I guess that doesn't classify me as a minimum wage earner, however we as a group don't spend money on things beyond rent, food and clothes (from thrift shops). I don't see how a healthy economy runs on only selling stuff to the few elite in the community. Keeping wages low only serves to slow the economy and encouraging lower wages will kill more companies - especially small ones. Where do they expect to get their customers from? If they think sales are low now... just wait until there are more poverty level patrons to draw from.

Kreditanstalt the Scary

Kreditanstalt said:

"For the rest of you, "discrimination" and "exploitation" are part of LIFE."

Oh my. How does one answer such rabid ideology? One could say, Yes that's part of life because ideologists like yourself make it so. One could also point out that among the great achievments of mankind over the last few centuries is the creation and invention of social policies that actually overlook the R-complex drive to self-satisfaction at any cost to society, by attempting to help those who are unable (due mainly to the ostentatious consumptive ownership of property and power by the greedy) to help themselves. One could also point out that like most Libertarian ideologues Kreditanstalt fails to observe the importance of degree -- i.e. it is the degree of discrimination and exploitation that define its harm to those who have no access to the tools that will enable them to overcome it.

But then talking to a Libertarian about reality is somewhat like talking to a Creationist about evolution: The Creationist / Libertarian stands hands over ears screaming "Neener neener neener; I can't hear you!"

Actually, this Kreditanstalt person really gives me the willies. He/she is the embodiment of the raging anti-social Libertarian (or uber-capitalist) whose sole argument is I lucked out and got mine; screw you.

Very scary.

kreditanstalt

You're changing your argument, and you haven't answered mine.

The "violence" of taxation is a myth. If you really think that, try moving to Iraq where taxation is a myth and the violence of daily life will consume your every waking moment, never mind the search for health care, education trasportation, business opportunity, and the people with the training and quality of life to make it all happen. Those simply don't exist there, unless you belong to one of the clans and are in their good books.

Exploitation doesn't come only by importing a wage slave from Africa and seizing her passport. A government-acknowledged and -led monopsony is no less exploitative than a private agreement between you and your maid.

...but anyway, whatever helps you rest well at night.