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Do Minimum Wage Laws Accomplish Anything?

Published

3 months ago

6 minute read

The Audit

David Clinton

All the smart people tell us that, one way or another, increasing the minimum wage will change society. Proponents claim raising pay at the low end of the economy will help low-income working families survive in hyper-expensive communities. Opponents claim that artificially increasing employment costs will either drive employers towards adopting innovative automation integrations or to shut down their businesses altogether. Either way, goes the anti-intervention narrative, there will be fewer jobs available.

Well, what’ll it be? Canadian provinces have been experimenting with minimum wage laws for many years. And since 2021, the federal government has imposed its own rate for employees of all federally regulated industries. There should be plenty of good data out there by now indicating who was right.

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Historical records on provincial rates going back decades is available from Statistics Canada. For this research, I used data starting in 2011. Since new rates often come into effect mid-year, I only applied a year’s latest rate to the start of the following year. 2022 itself, for simplicity, was measured by the new federal rate, with the exception of British Columbia who’s rate was $0.10 higher than the federal rate.

My goal was to look for evidence that increasing statutory wage rates impacted these areas:

  • Earnings among workers in full-service restaurants
  • Operating profit margins for full-service restaurants
  • Total numbers of active businesses in the accommodation and food services industries

I chose to focus on the food service industry because it’s particularly dependent on low-wage workers and particularly sensitive to labour costs. Outcomes here should tell us a lot about the impact such government policies are having.

Restaurant worker income is reported as total numbers. In other words, we can see how much all of, say, Manitoba’s workers combined took home in a given year. For those numbers to make sense, I adjusted them using overall provincial populations.

Income in British Columbia and PEI showed a strong correlation to increasing minimum wages. Interestingly, BC has consistently had the highest of all provinces’ minimum wage while PEI’s has mostly hung around the middle of the pack. Besides a weak negative correlation in Saskatchewan, there was no indication that income in other provinces either dropped or grew in sync with increases to the minimum wage.

Nation-wide, by weighting results by population numbers, we got a Pearson coefficient 0.30. That means it’s unlikely that wage rate changes had any impact on take-home income.

Did increases harm restaurants? It doesn’t look like it. I used data measuring active employer businesses in the accommodation and food services industries. No provinces showed any impact on business startups and exits that could be connected to minimum wage laws. Overall, Canada’s coefficient value was 0.29 – again a very weak positive relationship.

So restaurants haven’t been collapsing at epic, extinction-level rates. But do government minimums cause a reduction in their operating profit margins? Apparently not. If anything, they’ve become more profitable!

The nation-wide coefficient between minimum wages and restaurant profitability was 0.88 – suggesting a strong correlation. But how could that be happening? Don’t labour costs make up a major chunk of food service operating expenses? Here are a few possible explanations:

  • Perhaps many restaurants respond to rising costs by increasing their menu prices. This can work out well if market demand turns out to be relatively inelastic and people continue eating out despite higher prices.
  • Higher wages might lead to lower employee turnover, reducing hiring and training costs.
  • A higher minimum wage boosts worker incomes, leading to more disposable income in the economy. Although the flip-side is that we can’t see strong evidence of higher worker income.
  • Higher wages can force unprofitable, inefficient restaurants to close, leaving stronger businesses with higher market share.

In any case, my big-picture verdict on government intervention into private sector wage rates is: thanks but don’t bother. All that effort doesn’t seem to have improved actual incomes on a population scale. At the same time, it also hasn’t driven industries with workers at the low-end of the pay scale to devastating collapse.

But I’m sure it has taken up enormous amounts of public service time and resources that could undoubtedly have been more gainfully spent elsewhere. More important, as the economist Alex Tabarrok recently pointed out, minimum wage laws have been shown to reduce employment for the disabled and measurably increase both consumer prices and workplace injuries.

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Trump demands free passage for American ships through Panama, Suez

Published on April 28, 2025

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MXM logo MxM News

Quick Hit:

President Donald Trump is pushing for U.S. ships to transit the Panama and Suez canals without paying tolls, arguing the waterways would not exist without America.

Key Details:

  • In a Saturday Truth Social post, Trump said, “American Ships, both Military and Commercial, should be allowed to travel, free of charge, through the Panama and Suez Canals! Those Canals would not exist without the United States of America.”

  • Trump directed Secretary of State Marco Rubio to “immediately take care of, and memorialize” the issue, signaling a potential new diplomatic initiative with Panama and Egypt.

  • The Panama Canal generated about $3.3 billion in toll revenue in fiscal 2023, while the Suez Canal posted a record $9.4 billion. U.S. vessels account for roughly 70% of Panama Canal traffic, according to government figures.

Diving Deeper:

President Donald Trump is pressing for American ships to receive free passage through two of the world’s most critical shipping lanes—the Panama and Suez canals—a move he argues would recognize the United States’ historic role in making both waterways possible. In a post shared Saturday on Truth Social, Trump wrote, “American Ships, both Military and Commercial, should be allowed to travel, free of charge, through the Panama and Suez Canals! Those Canals would not exist without the United States of America.”

Trump added that he has instructed Secretary of State Marco Rubio to “immediately take care of, and memorialize” the situation. His comments, first reported by FactSet, come as U.S. companies face rising shipping costs, with tolls for major vessels ranging from $200,000 to over $500,000 per Panama Canal crossing, based on canal authority schedules.

The Suez Canal, operated by Egypt, reportedly saw record revenues of $9.4 billion in 2023, largely driven by American and European shipping amid ongoing Red Sea instability. After a surge in attacks by Houthi militants on commercial ships earlier this year, Trump authorized a sustained military campaign targeting missile and drone sites in northern Yemen. The Pentagon said the strikes were part of an effort to “permanently restore freedom of navigation” for global shipping near the Suez Canal.

Trump has framed the military operations as part of a broader strategy to counter Iranian-backed destabilization efforts across the Middle East.

Meanwhile, in Central America, Trump’s administration is working to counter Chinese influence near the Panama Canal. On April 9th, Defense Secretary Pete Hegseth announced an expanded partnership with Panama to bolster canal security, including a memorandum of understanding allowing U.S. warships and support vessels to move “first and free” through the canal. “The Panama Canal is key terrain that must be secured by Panama, with America, and not China,” Hegseth emphasized during a press conference in Panama City.

American commercial shipping has long depended on the canal, which reduces the shipping route between the U.S. East Coast and Asia by nearly 8,000 miles. About 40% of all U.S. container traffic uses the Panama Canal annually, according to the U.S. Maritime Administration.

The United States originally constructed and controlled the Panama Canal following a monumental effort championed by President Theodore Roosevelt in the early 20th century. After backing Panama’s independence from Colombia in 1903, the U.S. secured the rights to build and operate the canal, which opened in 1914. Although U.S. control ended in 1999 under the Torrijos-Carter Treaties, the canal remains vital to U.S. trade.

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2025 Federal Election

Columnist warns Carney Liberals will consider a home equity tax on primary residences

Published on April 27, 2025

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From LifeSiteNews

By Steve Jalsevac

The Liberals paid a group called Generation Squeeze, led by activist Paul Kershaw, to study how the government could tap into Canadians’ home equity — including their primary residences.

Winnipeg Sun Columnist Kevin Klein is sounding the alarm there is substantial evidence the Carney Liberal Party is considering implementing a home equity tax on Canadians’ primary residences as a potential huge source of funds to bring down the massive national debt their spending created.

Klein wrote in his April 23 column and stated in his accompanying video presentation:

The Canada Mortgage and Housing Corporation (CMHC) — a federal Crown corporation — has investigated the possibility of a home equity tax on more than one occasion, using taxpayer dollars to fund that research. This was not backroom speculation. It was real, documented work.

The Liberals paid a group called Generation Squeeze, led by activist Paul Kershaw, to study how the government could tap into Canadians’ home equity — including their primary residences.

Kershaw, by the way, believes homeowners are “lottery winners” who didn’t earn their wealth but lucked into it. That’s the ideology being advanced to the highest levels of government.

It didn’t stop there. These proposals were presented directly to federal cabinet ministers. That’s on record, and most of those same ministers are now part of Mark Carney’s team as he positions himself as the Liberals’ next leader.

Watch below Klein’s 7-minute, impassionate warning to Canadians about this looming major new tax should the Liberals win Monday’s election.

Klein further adds:

The total home equity held by Canadians is over $4.7 trillion. It’s the largest pool of private wealth in the country. For millions of Canadians — especially baby boomers — it’s the only retirement fund they have. They don’t have big pensions. They have a paid-off house and a hope that it will carry them through their later years. Yet, that’s what Ottawa has quietly been circling.

The Canadian Taxpayer’s Federation has researched this issue and published a report on the alarming amount of new taxation a homeowner equity tax could cost Canadians who sell their homes that have increased in value over the years they have lived in it. It is a shocker!

A Google search on the question, “what is a home equity tax?” returns the response:

A home equity tax, simply put, it’s a proposed levy on the increased value of your home, specifically, on your principal residence. The idea is for Government to raise money by taxing wealth accumulation from rising property values.

The Canadian Taxpayers Federation has provided a Home Equity Tax Calculator Backgrounder to help Canadians understand what the impact of three different types of Home Equity Tax Calculators would have on home owners. The required tax payment resulting from all three is a shocker.

Keep in mind that World Economic Forum policies intend to eventually eliminate all private home ownership and have the state own and control not only all residences, but also eliminate car ownership, and control when and where you may live and travel.

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Steve is the co-founder and managing director of LifeSiteNews.com.
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