The Fascinating State of the Minimum Wage

A Full Military Funeral, with Honours

At 26 hours weekly, I am tied with one other employee for the most-often-present non-supervisory employee at my job. I work hard in those 26 hours to try and find a 27th or a 28th.

Last year, between two similar jobs and a capital gain I made about $25,000, which is actually quite a bit more than what is considered to be impoverished  However, the circumstances of that capital gain won't repeat themselves and next year, with all other things being current and no provincial increase in the minimum wage, I can reasonably expect to make, give or take, $11,000, which is all of about 500 dollars above the line at which the federal government can tax my income.

Hahahahaha!

Either way, the government /does/ tax your income whether you receive a return at the end of the year or not, so I operate under the assumption I am taxed. In practice, that pulls in at around 18% of the paycheque off the top, leaving me with 82% of what I earned to work with. If it's easier to wrap your head around, I get .82 on the dollar for all living expenses.

However, with very small exceptions, pretty much everything that I buy is taxed at 13%, partly provincially and partly federally. That means I functionally get .71 on the dollar. If I make $11,000 this current year, as I can reasonably expect to do working a single job, I actually only have just a little under $8,000 to work with.

In practice, this number is actually even lower, because the income tax deduction is not the only deduction taken off the paycheque. We also pay into two federal programs - the Canada Pension Plan, and Employment Insurance. The former I don't have much of an opinion on, but the latter...

$1500 of interconnected spare parts

Well, that's a digression and I'll have to get into at a later time, but we'll suffice it to say that it's easier to make a home owner's insurance claim in which the police say you robbed your own house than it is to make an EI claim.

At any rate, taking those two programs out turns my annual net to something closer to $7300 dollars.

I don't have many responsibilities. I have rent, some groceries, and my phone. My rent includes internet service and power, the other groceries, and water. My pets, such as they are, represent very little expense to me now that I have the equipment. So far this year, not including the equipment itself, I've spent about $40 and, barring a crisis, I can reasonably expect not to spend any more.

My rent is $500 a month paid bi-weekly to make the money-management easier - taken out over the course of a year that's $6000, and about what I was paying for rent and utilities last year. My phone's another $75/month so we can call that $900. I have some small credit card debt that if I could magically clear overnight would cost me, say $800, but with the compounding interest, that's going to look more like $900.

Woops, now we're over budget at $7800 and I haven't even fed myself yet...

Now, bare in mind that I get away with such nonsense because I live extraordinarily cheaply. I don't have car payments and pay perhaps less than $40 a month in transportation fees, when I pay them at all - in the summer I can travel pretty much anywhere I need to except in special circumstances without paying a cent. I don't have a child. I barely drink, barely smoke, and my annual expenses on both accounts are probably a couple hundred dollars. I eat out when I can but I don't when I can't. I give good gifts when I can recall an occasion (or rather, that's a habit I'm trying to form).

I can build a hearty lunch for $1.80.

My expenses are minimal. And I cannot live on a minimum-wage job.

Granted, I could, if such a thing as a full-time, minimum wage job existed. But Canada's quiet recession is shrinking working hours since wages can't be shrunk. Employees are expensive, let me tell you, and the response of businesses with shrinking margins are to minimize costs - in practice, the only expenses you ever really control are your labour costs, and so..

26 hours is actually quite a long work week for someone on the minimum wage around here.

I can get a second job, but they don't exist either - not the kind needed. I need either something that will let me only work on the two days a week I have off, or work daytime hours doing just about anything else. Having my old teavana job back would actuall be ideal if I thought that company had a future in the local market, but it'sjust a little two Hollywood for our Santa Monica tastes.

Day jobs, full time or not, usually go to favoured, older workers who have been with the company for a good long time.

What's more, there is a plentiful supply of above-minimum-wage full time jobs that, while tolerable, are much less fun than what I'm doing now, and don't pay enough extra to make it worth my while. Part time, maybe, but that job doesn't exist.

Of course, raising the minimum wage would just shrink hours again. What we need is some sort of comprehensive, right-to-work sort of a thing. I don't know what that looks like yet, but I'm working on it.

Aaah! Economics!

It is impossible to write a blog post about economics-in-general. It is, in fact, all I can do not to try, because that would be embarking on writing a book, and I would rather make my name in paid writing through fiction rather than non-fiction. So, if you're wondering where I've been, it's mostly been thinking about economics. I might even post on a small subject of it, if I find the time after work.

French Boulengerie - A custom Blend!

Subsidies: The Governmental Weapon of Change

The polymer bank notes introduced in 2011 (for the $50)
and this month (for the $50). The remaining denominations
will be updated by late next year. Bank of Canada Photo.

I'm a bit of a numismatics freak. I like the concept of currency, the way we secure it, and the way it's evaluated. There's some really fun statistical math to be done there, and since I don't have an excuse to do engineering or physics problems as part of my school work, I tend to focus on mathematics. So you can understand my interest in the new polymer banknotes the Bank of Canada is issuing over the next year or so.

However, what I actually came in here to write about is the use of subsidies by governments on all three levels to influence industrial development, research, and essentially anything else they want done or changed. Subsidies are a sort of a double-edged sword, as we shall see.