Help a Real Victim of the Minimum Wage

It is easy to sympathize with 33-year-old Acsana Fernando. Since immigrating to Canada from Bangladesh as a refuge in 2002, she has struggled to find her footing. Bouncing from job to job trying to eke out a living, Ms. Fernando now works at a group home and earns the Ontario minimum wage of $10.25 an hour.

After she pays taxes she is lucky to take home somewhere between $1,100 and $1,300 per month, and that money goes quickly. After she pays rent for her subsidized apartment and covers groceries, Ms. Fernando doesn´t even have enough left over to buy a monthly bus pass. Instead she opts for the pricier pay-as-you-go option, something which leaves her economising on her bus rides more than she otherwise would.

Life is tough now, but optimistically she notes that it is better than it was a few short years ago. She needed $33,000 to sponsor her father to come to Canada, and did so by buying a second-hand car to sleep in, thus reducing both her transportation and housing bills. Worst of all, if she had remained in Bangladesh, she would probably have been married to a man she didn´t love who had three wives already.

I couldn´t imagine a worst case scenario for a Canadian than what Acsana Fernando has to go through on a daily basis, but I have to.

One of the great contributions of the 19th century French economist Frédéric Bastiat is that the single best test of a good economist is an ability to see past the obvious and apparent effects of an action in order to see its shielded or unseen effects. In few places is this skill more important than when analysing the minimum wage.

Price floors, like a minimum wage, have the effect of creating an excess supply of a good. As the price is set above the market-clearing level the result of the reduction in demand for the good is exacerbated by the increase in supply – too many people want to sell the good in question, and not enough people want to buy it. A surplus develops.

When price floors are enacted on specific goods, the result is typically surplus goods piling up in a warehouse. As part of Europe´s “Common Agriculture Policy”, price floors on many everyday foodstuffs created “butter mountains” and “wine lakes.” While these types of surpluses might seem like just another tasty treat to come out of Europe, when it comes to labour markets they should leave a bad taste in our mouths. As the quantity supplied increases while that demanded decreases due to a minimum wage, the surplus in question is unemployed masses.

While it is easy to lament that those earning minimum wage aren´t earning enough, it is difficult to justify the fact that some people aren´t learning anything because of the law.

There is no doubt that Acsana Fernando has a tough life trying to support her family on minimum wage, but at least she has a job. There are a little over 1.3 million Canadians who are unemployed today. At least some of them don´t have a job because of the minimum wage. It´s easy to sympathise with minimum wage earners´ lives, like Ascana Fernando´s, because we can see them, but the real victims are those unemployed folk that you never see.

If the press wants to raise support for an increased minimum wage, it could at least give us a story about a real victim of the law. Unfortunately, showing all those forced out of work because of the minimum wage might just be enough to get it repealed and put an end to the need for these types of heart-wrenching stories.

(Cross posted at mises.org)

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8 Responses to “Help a Real Victim of the Minimum Wage”

  1. Hayrick says:

    This sort of article makes me despair of our so called civilised society. We are social animals that are awarded by helping others. The end result of cold economic theory will result in robotics of everything and discarding people. Ever heard of 'let them it cake' … and the result. A basic wage is societies attempt to avoid that – the fact that it is set too low for people to partake fully in society is a reflection of the arrogance of the comfortable and the bloated misers. Reflect on whether they deserve to be part of the humanity or allowed to practice their extortion at the expense of others ad infinitum, what is the result of that? In fact what is Government for?

    • Ohhh Henry says:

      Actually it's minimum wage-ism which leads to robots replacing people, not laissez-faire economics.

      If the government attempts to force businesses to pay their least-skilled employees more than what they're worth in terms of their productivity, it causes businesses to look for other more cost-effective means to replace the workers. Laying off workers and investing in automated machinery is one of the ways that businesses attempt to maintain profitability in the face of government interference.

      Profits may be a dirty word to you, but without the potential of profits then nobody would ever save any money and invest it. Generating profits for the owners is the only moral and ethical way to run a business. The people who invest in and own businesses aren't arrogant, bloated misers, they're you and me. If you've ever had any CPP deducted from your paycheck then trust me, you're a business owner.

      The civilized and humane thing is to let employers and employees agree peacefully between each other what is a fair wage. Introducing the government between these two groups as a forced arbitrator of wage levels benefits the government by giving them more power, but doesn't benefit anyone else.

    • David Howden says:

      Hayrick:

      I too would like for everyone to earn enough to have a nice quality of life, but I'm a realist about it. Changing the price of labour through minimum wage is not going to achieve this goal. Since the law does force peoples' whose productivity is below the new mandated wage out of work, it would be nice if journalists wrote articles about these victims, instead of the ones who have jobs. In short, who is worse off: The one who has a job at minimum wage or the one who can't get a job because of it?

  2. Dr. Howden presents us with sound economic theory. Bastiat's "That Which Is Seen and That Which Is Not Seen", (available here: http://mises.org/page/1434), should be studied by everyone reading Dr. Howden's essay.

  3. John smith says:

    What a joke. What about the other hundreds of thousands born in canada citizens going through the same thing. Seems to me her father sold her into a marriage she didn't want to be in so she flees to Canada and brings him and her brother with her to free load off the tax payers. I feel no sympathy for her. I have worked the same jobs, made the same wage. We all make sacrifices. She chose her life as much as I chose mine. You will not see an article about me complaining about how the Canadian public school system failed me and how I am unable to obtain well paying employment without an over priced post secondary education. But I suppose this article will have the government reconsider minimum wage, after all she is a poor immigrant and in this country they come first

  4. Abdul Hariri says:

    I am ready to help Ascana to get off and start a better life provided she is self-motivated.

    Network marketing has saved and is still saving the lives of a lot of
    people who were even in situations direr than Ascana's.

    She is ambitious lady and I am ready to work with her to achieve her dreams.

    Looking to hearing from you, anbody,or Ascana,

    Cordially

    Abdul M. Hariri

    Independent Business Owner

    Brantford, Ontario

    519 802-5340

  5. vince says:

    David Howden
    I like to inform you one thing you might have won all the award but I like you to know about Kevin Carter the photographer. Your gread will not take you no where. Canada is a democratic country but gread had taken a bad turn. I have to say this as you know teachers could not teach Maths it is a joke. I say to you one more thing put that girl to teach she will be much better then the honeymoon going on the education system. I challenge you to write a story about the four managment for one worker and no people touch them as this are family members of the corporation or the city. Why don't they down size the managment why the workers arte down size pay proper wage as the union came in because people were taking advantage of people by paying them cheap wages. But it went out of hand as the union became strong an started demanding more I don't blame the unio its the coprotation fall as if they had treated people properly nothing like this would happen. Why don't you talk about the refuges system or people using illigal people to work. I tell you one more thing write about refuge or social housing and how rich people are living in social housing.

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