Proponents of increasing corporate taxes and minimum wages often argue that businesses pay for the increases. The logic is that tax and wage increases can't be bad if big, evil, profit-seeking corporations pay instead of workers and consumers. Unfortunately, that's a fallacy.
On Wednesday, Ontario raised its minimum wage by 75 cents, to $10.25 an hour. It now has the highest minimum wage of any jurisdiction in Canada or the United States. So when I visited my local Little Caesars' yesterday evening to pick up a pizza, I wasn't surprised to see a notice saying they have raised the price of their Hot-and-Ready medium pizzas (other than pepperoni) by 50 cents. Coincidence? I think not. Little Caesars' is facing higher costs with the minimum wage increase, so it's passing most of those costs on to the consumer.
But consumers aren't the only ones who are harmed by the minimum wage. One expects fewer people will buy pizzas now that they cost more, which means the local franchise owner will earn less money at the end of the day.
The store was also understaffed when I visited (their pizzas were "hot" but not "ready" when I arrived), perhaps because the franchise owner is not able to afford as many employees at the higher minimum wage. If so, that hurts the young people who would have been able to get a job at Little Caesars' without the wage increase, but are now having trouble finding work. It also hurts existing employees — one young worker was almost in tears when I visited because the small staff was having difficulty keeping up with the demand for pizzas.
Sure, the people behind the counter at the Little Caesars' are making an extra 75 cents per hour because of the minimum wage increase. But don't fool yourself into thinking it's the big, bad corporations that are only ones paying for it.
Friday, April 2
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