Quote:
Originally Posted by Maritime Q-Scout
If minimum wage worked in 1975 why wouldn't the equivalent wage work now?
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You have to be careful applying lessons learned in an economic climate that is almost 50 years removed. It's for the same reasons that economic decisions applied in 1925 wouldn't necessarily apply to 1975, or why economic decisions applied in 1875 wouldn't apply to 1925.
The world is a much different place nowadays. The economy in 1975 was much more dependent on manual or low-skilled labour, therefore people in that economic demographic had a lot more power. The labour demand in 1975 was enormous even if they weren't jobs people wanted (Canada and the U.S. increased immigration to fill the void).
In Ontario, they didn't see unemployment rise as some predicted when minimum wage increased, but they did see a change over. Small businesses and entrepreneurs were pushed aside and larger corporations took over the commercial spaces. Mom and pop businesses closed down, Starbuck's, Dollar Stores, and Domino's moved in. The employment rate stayed more or less the same, but so did the poverty rate as labour cost increases were passed down to the consumers. It really did nothing except make the economic climate less friendly to small businesses where small changes in margins have a huge effect.