Minimum Wage Will Increase on February 1

Special Report By 
Robert Kirwan
Valley East Today

   What will be seen as welcome news for the thousands of people who are working for the minimum wage may be seen as bad news for many businesses.  On February 1, 2006, the Ontario government is raising the minimum wage from its current level of $7.45 per hour to $7.75 per hour. One year from now, on February 1, 2007, the minimum wage will increase again to $8.00 per hour.
   Increases will also apply to students under 18 years of age and employed for not more than 28 hours a week. Their wage rate will go from $6.95 to $7.25 and then a year from now to $7.50 per hour.
   People who work in bars and restaurants serving liquor will see their rate go from its current level of $6.50 to $6.75 on February 1 and then to $6.95 per hour a year from now.
   The 6.9% increase in the minimum wage rate over the next two years is seen as a way of helping low-paid workers benefit from Ontarioís economic growth while keeping Ontario businesses competitive.
   The minimum wage increase is expected to have some impact on local businesses, but in reality, many retailers already pay their employees a slightly higher rate. Nevertheless, recent statistics indicate that about 60% of all workers in the City of Greater Sudbury earn less than $10.00 per hour.
   While on the surface the raising of the minimum wage and the abolishment of mandatory retirement may appear to be unrelated, the two may have a direct impact on each other.
   The Ontario legislative assembly voted 60-5 on December 8, 2005 in favour of the legislation which will take effect on December 12, 2006. This will give employers time to adapt their policies to comply with the law and develop a plan for dealing with employees who wish to continue to work after they turn 65. Employees will now be free to decide when they want to retire, taking into consideration all of their own personal circumstances.
   While is it understood that there may be some occupations which will be able to refuse to employ people beyond the age of 65 for safety or other reasons, the Ontario Human Rights code will protect most of the people aged 65 and over from age discrimination for most employment purposes.
   By raising the minimum wage to $8.00 effective February 1, 2007, this means that many people who qualify for a pension from their current or former employers, or who will qualify for benefits under the Canada Pension Plan, will now be in a better position to take on part-time or full-time positions in retail or hospitality industries. They will be more willing to accept the lower rate since the money will be used to supplement their existing pension. Even a 20 hour a week job will produce income in the range of over $640 a month. A full time position could yield upwards of $1200 to $1300 per month before deductions. This may give an older person enough of an increase in monthly income to cope with the financial challenges faced after retirement. It may also give a person a chance to continue to make a valuable contribution to society well into his or her 70ís or 80ís. Some businesses can benefit greatly from what older people have to offer, especially since the Baby Boomers are now beginning to turn 60 years of age.
   Therefore, when you combine the news from the increase in minimum wage with the abolishing of mandatory retirement, it actually may be welcome news for small business owners in the area who are having a hard time finding young people to fill part-time positions for minimum wages. There will soon be a lot of people over the age of 65 who will be glad to fill those positions in order to help top-up their pensions.

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