© David Micalef - 2019

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EMPLOYER INCENTIVE

INCOME INEQUALITY

In a capitalist economy, the wage for any position is established by free market forces dictated by the supply and demand for the skill set required to perform a job in a competent manner. In simpler terms: if fewer workers have skills and experience that are in demand, they can negotiate a higher wage. Jobs that require little to no training or skill, which theoretically anyone can do, will be paid a lower income. This is self-evident.

While work can give individuals meaning and purpose, the primary reason anyone works is to be able to live. It costs money to afford food, shelter, and other necessities. By working, Canadians are rewarded with money for services rendered. Many would argue that Canadians have a choice in regards to who they work for and what they do. This is false - being without steady and sufficient income can be a life changing event, as most Canadians do not have enough money in their bank accounts to be without a job for any length of time. This means that Canadians will bear with potentially dangerous, unpleasant, and low paying jobs so that they may earn a living. Being unemployed is not a luxury many Canadians can afford, especially given our crippling debt. The idea of choice is just an illusion.

Why is the average wage, in Canada, so low in relation to the cost of living? Cost of living, in Canada, has increased significantly over the past few decades while Canadian wages have remained the same. The reason is multi-faceted:

  1. Programs like the Temporary Foreign Worker allow foreigners to be employed at lower wages than what a Canadian could accept;

  2. Certain Social Impact Bonds, put forth by the current government, would reward hiring immigrants over Canadians, who are willing to work for less money;

  3. Those of retirement age are staying in the work force, occupying positions that the younger generations could fill;

  4. As companies become leaner, more efficient, and automation becomes more common - a number of positions are made obsolete or reduced;

  5. Immigration, as well as an increasing Canadian population, has skewed the balance between available jobs and workers, especially for low skill positions;

  6. The capitalist system in Canada is set up in such a manner as to reward paying employees less;

  7. Global market forces have incentivized outsourcing; and

  8. Small businesses are rewarded with low taxes rates, while larger businesses are punished with higher tax rates- reducing the incentive and potential for these companies to grow and hire more people.

I believe that wages need to increase, while cost of living needs to decrease.

I would aim to provide an incentive for companies to pay their workers more. I do not believe that taxing more is the answer. I believe that corporate welfare should only be provided if employers meet certain criteria. For example, if a company wishes to receive corporate welfare (such as writing off certain business expenses), they will be obligated to meet Canadian employment criteria. That criteria will be dependent on what percentage of the employees are Canadian citizens or permanent residents.

DAVID

MICALEF