Minimum Wage Increase in Ontario for Fiscal Ones -myassignmenthelp

Question: Discuss about theMinimum Wage Increase in Ontario for Fiscal Ones. Answer: Overview The economic regulatory policies, monetary as well as fiscal ones, taken by the governing authorities of a country, have considerable implications on the population of the country, the implications having the chance of being positive as well as negative. Keeping this aspect of the economic policies into account, the concerned report tries to discuss and analyse the effects of the minimum wage hike policy, which has been implemented in Ontario, Canada, in the recent periods. The minimum wage of Ontario, which has been at a moderate standard of $11.60 an hour in the last few years, have been hiked considerably by the governing authorities, amounting to $14 per hour per worker, as has been announced on 1st January, 2018. The minimum wage rate in Ontario is also expected to rise to $15 per hour per worker in the succeeding year[1]. This wage hike has brought considerable implications on the labour market as a whole, the implications being both negative as well as positive and the hike in the minimum wage of the region is expected to have effected not only the workers but also the employers operating commercial organizations in this region[2]. The considerable implications of this decision and the gravity of the situation in the overall business scenario of Ontario, is identified and discussed in the concerned report. Research Analysis The increase in the minimum wage in Ontario has on one hand is expected to have increased the welfare of the workers, especially those belonging to the lowest paid cartel of the work force, consisting of the marginalised workers. The hike in the minimum wage is also expected to benefit those workers who are not categorically the lowest paid ones[3]. They are expected to be benefitted due to the ripple effect of the minimum wage hike in the country as the employers may need to hike their wages in order to maintain the comparative hierarchy in the organizations, according to the skill levels of the employees. However, the increase in the minimum wage of Ontario has exerted pressure on the employers and entrepreneurs in the region, as they are now required to pay much more to their workers[4]. As can be seen from the recent statistics, there has been a significant decline in the total number of part time employees in Ontario itself, with almost 59,000 jobs getting lost in the contemporary period. Given this scenario, the increase in the wage hike is not expected to have helped considerably the employees or the employers[5]. The problem is not expected to be confined to the employers only and is also expected to affect the employees as can be seen with the help of the following figure: Figure 1: Effects of increase in the minimum wage[6] As can be seen from the above figure, with the increase in the minimum wage, above that of the equilibrium wage level, the supply of labour is expected to increase as more workers are expected to be willing to work. However, due to the increase in the cost of production, the employers are expected to reduce their demand for employees and may be only willing to employ the high skilled and productive workers, thereby showing a reduction in the overall demand in the labour market, which creates an excess supply in the labour market leading to unemployment generation in the economy. Given this scenario, the employers in this region are expected to feel the pressure of increased cost in their production process, which may hamper the productive efficiency of these businesses. The business may either tend to relocate from Ontario to some other region with lower minimum wages or may also try to lay off the low skilled workers and demand for the higher skilled ones in order to keep their productive efficiency constant. This in turn, is expected to increase the demand for high skilled workers, thereby increasing their wage, which again can have mixed implications on the employers as well as the workers and on the overall economic welfare of the region[7]. Conclusion As can be seen from the above discussion, the minimum wage hike in Ontario, in the beginning of the current year, is expected to have mixed outcomes on the economy of the region as a whole. The results are still not clear as it takes time to observe the multilateral implications of such policies. However, there remains a chance of higher cost pressures on the employers and the marginal employees or low paid workers also face the threats of layoffs in the current scenario, which in turn can lead to the creation of a chronic unemployment problem in the region in the log run. Bibliography "12.3 Labor Markets At Work | Principles Of Economics". 2018.Open.Lib.Umn.Edu. https://open.lib.umn.edu/principleseconomics/chapter/12-3-labor-markets-at-work/. Cbc.ca. 2018. "Canadians Are The Guinea Pigs In A Real-Life Minimum Wage Experiment: Don Pittis | CBC News".CBC. https://www.cbc.ca/news/business/minimum-wage-experiment-1.4473095. In.reuters.com. 2018. "Minimum Wage Hike Has Rocky Start In Canada's Ontario Province".IN. https://in.reuters.com/article/us-canada-wages-ontario/minimum-wage-hike-has-rocky-start-in-canadas-ontario-province-idINKBN1EX2CN. Mahboubi, Parisa. 2018. "The Ripple Effect Of OntarioS Minimum-Wage Increase".The Globe And Mail. https://www.theglobeandmail.com/report-on-business/rob-commentary/the-ripple-effect-of-ontarios-minimum-wage-increase/article38017258/. Meer, Jonathan, and Jeremy West. "Effects of the minimum wage on employment dynamics."Journal of Human Resources(2015). Schmitt, John. "Why does the minimum wage have no discernible effect on employment?."Center for Economic and Policy Research22 (2013): 1-28.