Another perspective on minimum wage cost
Yes, yes, I know this blog is supposed to be about my books and writing life. However, part of my writing life also revolves around what keeps this family of mine solvent, and that very much has to do with my husband who is a skilled tradesman in a rather specialized area of the glass industry.
There has been an announcement by the Ontario government a hike in minimum wage is forthcoming. This is an initiative I very much laud and support. It’s important to allow people to earn a fair wage, to be able to live and prosper. But in all the rhetoric bandied about by both supporters and detractors of this minimum wage initiative, I cannot help but wonder if many of those people, who are not tradespeople, stop to consider a hidden hypocrisy in much of the argument, that of what we are willing to pay the tradesperson who comes into our homes to repair, to build, to renovate our environments.
How many of us ask the tradesperson if there’s a discount for cash? Or if they’d be willing to forgo charging HST? Or if they’d be willing to meet the ridiculously low price of some other large contracting firm which doesn’t come with impeccable credentials and references? There is an assumption if a discount is given by the tradesperson, especially if the job is paid in cash, that the income from that job will go unreported and directly pocketed, essentially becoming part of the underground economy.
What isn’t generally understood by the public is that a large percentage of tradespeople live in fear of an audit by CRA, because contractors and tradespeople are considered an easy target by the CRA, and so many of those very same tradespeople are scrupulous about reporting all income, whether paid in cash, or discounted, or not. What that means to those tradespeople is they end up paying the HST on behalf of their clients. That means 13% off the profit of the job. And if the client has pressured the tradesperson into meeting the deep discount of a larger firm, which is willing to give that discount just to keep crews working, that also means a further reduction of profit for the small tradesperson who likely is more qualified and better-skilled than the people employed by the larger firm, a firm which likely pays its trades minimum wage, and has a revolving door for its employees.
So, next time you hire a tradesperson to do work in your home, think about that. Think about what you’re asking when you don’t want to pay the HST and pressure the tradesperson into taking a 13% hit on his or her income.
Words for thought.
