Higher wages mean higher sales
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Dec 05, 2013  |  Vote 0    0

Higher wages mean higher sales

Listowel Banner

There’s been a proliferation of news stories this holiday season dealing with the attempts by big companies to offset their employees’ living expenses without actually paying them a living wage.

A Walmart in Ohio has allegedly organized a canned food collection for employees who can’t afford to feed their families given their meager earnings. McDonalds posted an online memo advising employees to sell their Christmas gifts in order to keep their heads above water this December.

If these big chains were serious about helping their employees out of dire financial straights, couldn’t they simply pay them more?

We’re told more and more that this is simply not an option. When the argument for raising the minimum wage comes up, opponents inevitably warn us that doing so will push the costs onto consumers.

But it would seem Canadians are doomed to pay a high cost for goods no matter what employees are paid. A recent report by CBC’s Marketplace laid bare the reality of “country pricing.”

Canadians typically pay prices for goods that are substantially higher than American prices. This made sense when our dollar was worth a lot less than the Americans’, but now that the two currencies are near equal, cross-border pricing should reflect that.

Manufacturers claim the price disparity is due to Canada’s higher cost of labour and transportation issues, but the truth is they’re simply enjoying overcharging Canadians too much to change. Extra cash is extra cash. If no one’s stopping you, why stop?

That said, surely there’s an upside? Won’t those higher prices result in higher wages for people in the retail and manufacturing sectors?

Not likely. Canadian retailers pay more to manufacturers for their goods, giving retail more fuel for their “can’t afford a pay hike” argument. Meanwhile, those who toil in the manufacturing sector are made to accept lower wages, longer hours, and less benefits or else risk losing their jobs to China.

The result? Broke Canadians crossing the border to shop, draining billions of dollars out of the Canadian economy annually in order to save what little cash they have. It’s a vicious cycle.

The same logic applies to the minimum wage argument. Say what you want about what’s fair; the fact is that big companies are thoroughly enjoying the money they’re saving by not paying their employees.

If we’re serious about bolstering the economy, we have to ensure that a majority of Canadians have expendable incomes. That means reasonable wages. It’s a far less short-sighted means to profit; one where we all benefit.

- Special to The Listowel Banner

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