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The Progressive Economics Forum

Saskatchewan’s Rising Cost of Living

Today’s Consumer Price Index provides further evidence of Saskatchewan’s rising cost of living. Among the provinces, Saskatchewan is tied for the second-highest annual inflation rate: 2.0%.

Consumer prices decreased in June from May in nine provinces (all except Alberta). But Saskatchewan was tied for the smallest monthly price decline: -0.3%.

Compared to the rest of Canada, Saskatchewan residents experienced nearly the largest increase in the cost of living over the past year and received a relatively small break last month.

The provincial government’s proposed labour law changes threaten to weaken the ability of workers to collectively bargain pay increases that keep pace with the rising cost of living. Saskatchewan now has Canada’s second-lowest minimum wage. The government should boost the minimum wage to a more reasonable level and then consistently increase it with inflation.

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Comment from Hamilton Realtor
Time: July 23, 2012, 1:10 pm

Haven’t we seen enough evidence yet to show that raising the minimum wage just increases the overall cost for things in the marketplace?

It’s a not a zero sum game, every dollar comes from somewhere and companies always pass the costs to the consumer.

Comment from Purple Library Guy
Time: July 24, 2012, 1:16 am

No, we haven’t seen enough evidence of anything of the sort. Is that the new canard now that the “it increases unemployment” line has been too thoroughly debunked?
Funny, every time anyone does anything that might cost corporations money, as they fight tooth and nail against it they always chorus “It doesn’t matter anyway because the costs will just be passed on to the consumer!” Yeah, sure. If that were true they wouldn’t bother to fight in the first place. But I don’t think it’s even relevant to this case. Use some logic:
The cost (paying higher minimum wage) goes to a particular section of the population: the working poor. The income grabbed to replace it comes from all consumers, rich middle class and poor. Ergo, even if you’re right, raising the minimum wage redistributes money downwards and reduces inequality.
The poor get all the gains but pay only a fraction of the price increases. They still have more, all of which they will spend on other goods that they wouldn’t have been able to afford. This will be at the expense in part of money the very rich would otherwise have had (but not spent most of, because unlike the poor the rich don’t spend all their money). Increased minimum wages therefore would slightly increase aggregate demand, boosting economic activity.

Comment from Hamiltonian
Time: July 30, 2012, 7:32 am

@Hamilton Realitor – the assumption that increasing a business expenses via minimum wage increase will pass on the cost to the consumer and/or reduce jobs is the same logic that reducing business expenses via tax cuts will pass on savings to the consumer and/or create jobs. There is insufficient evidence to say min wage increase will result in higher price increase, but there is ample evidence showing that savings from tax cuts do not get passed onto the customer nor do they create jobs. Companies sit on the savings, get accustomed to it, and then demand more tax cuts.

Comment from Belastingschijven
Time: October 7, 2012, 10:17 pm

It will be very difficult for the employees who work with minimum wage and live in a place with high inflation. As suggested in your post, the government should link the minimum wages with inflation rate.

Comment from swf obfuscator
Time: October 14, 2012, 10:22 am

The minimum wage isn’t so high that it puts a great hardship on business. I would content that if a business can’t afford to pay employees about $7 per hour, perhaps that company needs a new business model. The minimum wage is a value that just barely keeps people from being homeless. Without a minimum wage, businesses would go lower and lower with pay, and, especially in this economy, would find people poor enough that they just had to “take it or leave it.” Note migrant field hands, who will work for $5 or less cash picking crops. Businesses love ’em, and would probably love to figure out how to pay them even less.

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