Ethan Tam’s blog post, titled “The Fight For Fifteen,” describes the implications that would result from an increase in British Columbia’s minimum wage to $15 an hour. Although his article uses great economic theories to argue against a hike in the minimum wage, it falls short of addressing social issues, such as poverty, that affect thousands of people across the province, bringing into question issues surrounding ethics.
(Source: CBC)
One of the major arguments against raising the minimum wage is that it will force companies to lay off many of their employees as a result of higher operating costs. However, opposing reports suggest that this is not at all the case; a change in the minimum wage has little to no effect on employment once one factors in the net benefit of implementing such a measure. According to a Forbes article published last year, “the change in cost is largely offset by the change in demand and other factors.” In other words, although it will cost firms more to support their employees (variable costs), the overall increase in demand for their products as a result of greater consumer buying power will, in turn, increase their revenues, allowing them to operate sufficiently at their current levels.
Proponents of increasing the minimum wage, such as Bernie Sanders, argue that the underlying purpose of raising minimum wage is not to increase employment; rather, it is designed to protect those who are most vulnerable in society, which would be considered by many to be the ethical thing to do.
Still not convinced? Recall how we first learned about business ethics on the third day of COMM 101. Think of the government as one large firm, who provides a service to its stakeholders (its citizens). According to Milton Freeman and his Stakeholder Theory, businesses must create value to their customers, suppliers, employees, and communities in such a way that advances the values of these key clients. Similarly, governments are responsible to their citizens and the values that they share.
With the cost of living being so high in BC, it is no doubt that raising the minimum wage would benefit those who are struggling to make ends meet in the province, while also advancing the public agenda of the government in power. In my opinion, inflation is a powerful economic force that will always exist, even in a society free of government price flooring regulations. Therefore, it is only in the social interest of society for governments to keep up with inflation by increasing the minimum wage every now and again.
Word Count: 424
Works Cited
Associated Press. “Minimum Wage in Ontario Is Still at a Minimum, Critics Say.” CBCnews. CBC, 30 Sept. 2016. Web. 16 Oct. 2016. <http://i.cbc.ca/1.3318437.1447448883!/cpImage/httpImage/image.jpg_gen/derivatives/16x9_620/fast-food-protests.jpg>.
DardenMBA. “Stakeholder Theory.” YouTube. YouTube, 13 May 2009. Web. 11 Sept. 2016. <https://www.youtube.com/watch?v=Ih5IBe1cnQw&feature=youtu.be>.
Harvey, John T. “The Real Argument For Raising The Minimum Wage.” Forbes. Forbes Magazine, 31 July 2015. Web. 16 Oct. 2016. <http://www.forbes.com/sites/johntharvey/2015/07/31/real-argument-for-raising-minimum-wage/#15317c963d97>.
Tam, Ethan. “The Fight for Fifteen.” Ethan Tam’s Blog. UBC Blogs, 2 Oct. 2016. Web. 16 Oct. 2016. <https://blogs.ubc.ca/etam/2016/10/02/the-fight-for-fifteen/>.