An alternative to minimum-wage hikes

Re: Wynne accuses shop owners of bullying — Jan. 5

The new minimum wage law is causing job and benefit losses for workers, higher prices for consumers, financial losses for small business owners, and who knows what other unintended side effects.

Given that there was nothing special about the value of the old minimum wage, we can reasonably say that (except for low-income pay) job-seekers, workers, consumers, and small-business owners would all benefit from a decrease in minimum wage.

As for helping the low-income workers themselves, a much simpler and less intrusive mechanism to provide fair wages already exists.

Ontario has progressive income tax rates, charging approximately five per cent on the first $40,000, nine per cent on the next $40,000, 11 per cent on the next $70,000, 12 per cent on the next $70,000 and 13 per cent on the rest.

It would not be difficult to change this to -50 per cent (yes, “minus”) on the first $20,000, zero per cent on the next $10,000, five per cent on the next $10,000 and so on.

People with high income would unnecessarily benefit from this change, so the rates on higher tax brackets would rise slightly to compensate. At the new minimum wage of $15 an hour, 40 hours a week equals about $30,000 a year. At $10 an hour, workers would still earn $30,000 — receiving $20,000 from their employer and $10,000 from their negative tax bracket.

As a bonus side effect, this would also hurt the illegal underground economy, since workers would now actually want to report their earnings.

In the upcoming election, a party that proposed such a decrease in the minimum wage would get my vote.

Ray Butterworth Waterloo