Chapter 8: Stabilization Policy

Source:http://www.cbc.ca/canada/nova-scotia/story/2009/04/01/ns-minimum-wage.html

Summary
In Canada, provincial governments are thinking ways of stimulate the current recession. One of the ways to help the economy is to increase the minimum wage. On April 1st, 2009, Nova Scotia’s minimum- wage earners are getting a raise. The new provincial rate is up to $8.60 per hour. Before the increase, it was $8.10. The provincial government said this will be the first of the three increases in the minimum wage over the course of a year and a half. In the fall of 2010, the minimum wage should be raised to $9.65 per hour. Statistically, the number of people working for minimum wage in Nova Scotia has gone up in the past few years.

Connection
The connection between this article and the textbook is wage control. The minimum wages are controlled by the provincial governments. The increase of wage would encourage people to spend more in this economy. The effect of this would be price ceilings. This would result in shortages in the marketplace. Eventually, the demands for goods and services would increase over time. Thus, the increase of goods and services would help our economy. The minimum wage increase helps the economy’s inflation on prices.

Reflection
Having this increase of minimum wage helps many people cope through this current recession. The two dollars increase helps people with the price inflation in the country. For a university student, the increase means an extra $6 a week from a part-time job at a campus convenience store. This would help the student pay the monthly bus pass which costs $45. However, this wage increase would hurt owners. Since there is a wage hike, there are also increase prices from fresh produce to electricity. This would add burden on the owners to pay a higher wage. I believe this wage increase would help the economy, even though some owners would be affected.