Running head: ANALYSIS OF A MINIMUM WAGE NEWS ARTICLE 1 ANALYSIS OF A MINIMUM WAGE NEWS ARTICLE 8 Analysis of “Is a $15 Minimum Wage Bad for Business in N.L.? Depends Who You Ask” Xiaotong Chen Simon Fraser University March 25, 2020 Analysis of “Is a $15 minimum wage bad for business in N.L.? Depends who you ask” In the news article “Is a $15 minimum wage bad for business in N.L.? Depends who you ask” (2020), the author compares the costs and benefits of raising the minimum wage. On one side of the argument, it is suggested that a rise will affect small businesses in Newfoundland and Labrador while on the other, an increased minimum wage will facilitate a healthier economy. Opponents such as the CEO of the St. John’s Board of Trade argue that raising the minimum wage to the national standard figure would be bad for small businesses. An example has been used for a small business in Springdale that, on implementing the $15 minimum wage, would spend $100,000 more. Therefore, raising the minimum wage would lead to increased costs of goods, cut hours, and lost jobs. On the other hand, proponents of the raise such as the $15 and Fairness group argue that increased wages would boost the spending power of workers. The advocacy group’s chair states that positive impacts have been observed in areas implementing increased minimum wage as more people can contribute to the local economy. It has been suggested that the N.L government maintains the link between minimum wage raises and inflation. In light of the 70,000 people making less than wage being pushed for, more investments can be made in the province to lift them out of poverty. Based on the article, it can be established that minimum wage is a crucial issue that does not only affect employees, but also companies and the local economy. It can be argued that the article’s use of N.L to present the argument is ideal as the jurisdiction has the second lowest minimum wage in the country. This allows a comparison to be made with other areas already experiencing the impacts of a raised minimum wage, and using these scenarios to suggest solutions for N.L. On one side, the argument made by the acting CEO of St. John’s Board of Trade against raising the minimum wage seems compelling. Not only does it bring the negative impacts of raised wages to light, but it also highlights the need for minimum wage being tied to the national consumer price index. The counterargument made by Alyse Stuart’s to this viewpoint is also indispensable, as it attempts to show how the calculus fails to consider the resultant increased power of spending among workers. Generally, the article presents the clash between commerce organizations and labor advocacy groups fairly. Both sides agree that the debate does not need to pit employers against employees. They also agree that legislators can analyze other jurisdictions on what works for them, and use such analyses to implement solutions in N.L. Based on the article, there is.

1. Running head: ANALYSIS OF A MINIMUM WAGE NEWS
ARTICLE
1
ANALYSIS OF A MINIMUM WAGE NEWS ARTICLE
8
Analysis of “Is a $15 Minimum Wage Bad for Business in N.L.?
Depends Who You Ask”
Xiaotong Chen
Simon Fraser University
March 25, 2020
Analysis of “Is a $15 minimum wage bad for business in N.L.?
Depends who you ask”
In the news article “Is a $15 minimum wage bad for business in
N.L.? Depends who you ask” (2020), the author compares the
costs and benefits of raising the minimum wage. On one side of
the argument, it is suggested that a rise will affect small
businesses in Newfoundland and Labrador while on the other,
an increased minimum wage will facilitate a healthier economy.
Opponents such as the CEO of the St. John’s Board of Trade
argue that raising the minimum wage to the national standard
figure would be bad for small businesses. An example has been
used for a small business in Springdale that, on implementing
the $15 minimum wage, would spend $100,000 more. Therefore,
raising the minimum wage would lead to increased costs of
goods, cut hours, and lost jobs. On the other hand, proponents
of the raise such as the $15 and Fairness group argue that
increased wages would boost the spending power of workers.
The advocacy group’s chair states that positive impacts have

2. been observed in areas implementing increased minimum wage
as more people can contribute to the local economy. It has been
suggested that the N.L government maintains the link between
minimum wage raises and inflation. In light of the 70,000
people making less than wage being pushed for, more
investments can be made in the province to lift them out of
poverty.
Based on the article, it can be established that minimum wage is
a crucial issue that does not only affect employees, but also
companies and the local economy. It can be argued that the
article’s use of N.L to present the argument is ideal as the
jurisdiction has the second lowest minimum wage in the
country. This allows a comparison to be made with other areas
already experiencing the impacts of a raised minimum wage,
and using these scenarios to suggest solutions for N.L. On one
side, the argument made by the acting CEO of St. John’s Board
of Trade against raising the minimum wage seems compelling.
Not only does it bring the negative impacts of raised wages to
light, but it also highlights the need for minimum wage being
tied to the national consumer price index. The counterargument
made by Alyse Stuart’s to this viewpoint is also indispensable,
as it attempts to show how the calculus fails to consider the
resultant increased power of spending among workers.
Generally, the article presents the clash between commerce
organizations and labor advocacy groups fairly. Both sides
agree that the debate does not need to pit employers against
employees. They also agree that legislators can analyze other
jurisdictions on what works for them, and use such analyses to
implement solutions in N.L. Based on the article, there is need
for legislators, labor groups, and commerce organizations to
adjust their mindset to one that addresses everyone’s needs
rather than creating a rift between them. With about 30% of the
people in N.L making less than the minimum wage, the article
offers a relevant solution on the need for both sides to find a
middle ground that will improve the lives of people and lift

3. them out of poverty.
According to Ghani (2016), increased minimum wages will not
lead to lost jobs or negative impacts on small businesses. It
argues that, instead, higher wages increase people's incentive to
work harder thus increasing labor productivity. When workers
receive relatively higher wages, their devotion and loyalty to
the company increase. The article further argues that increased
baseline wages would decrease inequalities in wages, bringing
millions out of poverty and increasing productivity. The author
agrees that raised minimum wages spur economic growth by
increasing the spending power for employees and boosting
demand. As a result, the quality of life for millions of workers
living below the poverty life surges. This would also result to
the reduction of government expenses associated with social
programs. Nonetheless, the article acknowledges that taken too
far, raised minimum wages can increase unemployment and hurt
small businesses. However, moderately increased wages have
been shown to decrease unemployment rates in countries like
Germany whose rates fell from 3 million to 2.5 million between
January and July 2015.
A 2018 article on “Do Minimum Wage Increases Cause
Financial Stress to Small Businesses? Evidence from 15 Million
Establishments” agrees with CBC News (2020) that an increase
in minimum wage can negatively affect the financial health of
small enterprises. The article is based on the fact that wages
make up a substantial fraction of costs incurred by these
businesses. Increased minimum wages will affect small
businesses especially where they cannot absorb the escalated
cost of labor, thus going bankrupt. Small, labor intensive setups
are more vulnerable to changes in the minimum wages
especially when they are situated in competitive and low-
income regions. They are likely to face high financial stress due
to lowered ability to secure bank loans and higher risk of
defaulting loans. Such businesses either lack the ability or

4. willingness to pass their increased costs to customers or to
adjust the labor mix by automating their processes. Increased
labor costs are associated with increased cost of goods that can
be passed to customers to avoid financial stress.
Zipperer (2019) agrees with CBC News (2020) that a gradual
raise in the minimum wage would favor employees and the
economy. The author gives a testimony based on up-to-date
economic research on how a federal $15 minimum wage would
be a crucial corrective for ensuring low-wage employees enjoy
the advantages of economic growth. It also shows that majority
of recent research indicates that increases in minimum wage
have minimal or no negative impacts on employees. Instead, the
raise has resulted to increased the pay of low-wage employees.
As such, their purchasing power is increased hence facilitating
the growth of the economy. The article agrees that workers in
all jurisdictions will soon require $15 every hour for
maintaining modest but sufficient standards of living.
A 2019 article by Reich and Byambaa conducts an empirical
analysis on Pasadena to show how increased minimum wages in
the state of California have resulted to the growth of the local
economy since their ordinance in 2016. The article recognizes
that businesses and employees respond to raised minimum
wages in ways that affect the demand for low skill workers.
Negative impacts on the business include substituting skilled
employees for unskilled ones, reduced sales after raising prices,
and reduced benefits and operating hours. Positive impacts of
higher minimum wage include saving on retention costs from
decreased employee turnover, and improved productivity. It also
increases the spending power of workers as they experience
increases in income and greater consumption propensities.
Figiure 1. A Graphical Representation of Unemployment Trends
for Pasadena and LA.

5. Source: Reich and Byambaa (2019).
The graph shows downward rates of unemployment that began
to flatten in earlier 2016 before the minimum wage was
increased. Nonetheless, the flattened trend is a reflection of a
slowdown in the growth of the state. Unlike most research
sources that relate unemployment to minimum wage, this article
shows unemployment trends as a reflection of regional
unemployment trends rather than the effects of minimum wage
policies.
While CBC News (2020) includes an argument of how an
increased minimum wage may boost economic growth, Meer and
West (2016) show how minimum wage decreases the level of
employment over long periods. The authors investigate whether
raises in minimum wage impact employment discretely or over
time. The article also uses illustrative models to show negative
impacts of the minimum wage on the growth of employment
opportunities. According to a study conducted by the authors, a
10 percent permanent raise in the minimum wages leads to the
reduction of employment rates by approximately 0.7% after a
period of 3 years. Generally, the article mentions a factor of
economic growth (employment rates) that is negatively affected
by increased minimum wages. The authors acknowledge that
there is minimal empirical knowledge on how inflation indices
could change the impacts of minimum wages on employment.
Drucker, Mazirov and Neumark (2019) study evidence based on
a unique administrative dataset to conclude that high minimum
wages influence the distribution of income more if the business
owners are at the top of the income distribution. On the
contrary, the effects of redistributing this income are reduced
when the employers have relatively lower incomes. These
findings are in agreement with CBC News (2020) on the effect
of minimum wages on small businesses. The article finds that
minimum wages lead to reduced profits for firms, and labor
intensive firms bear the burden of the cost of aggressive
adjustment of their workforces. Profits decline more for low

6. income business owners. This table represents descriptive
statistics of tax data from Israeli Businesses between 2004-2005
and 2009-2010
Figure 2. Add a caption
Source:Drucker, Mazirov, and Neumark (2019).
The table shows that average wages increased more for
companies where the portion of workers earning less than the
baseline wage was high. Generally, the table shows that
minimum wage only shows more improvements for wages in
high minimum wage (FMW) firms. Smaller companies are
affected negatively by increased minimum wages.
The six articles present similarities and differences to the
impact of minimum wages on economic growth, employees, and
businesses. Ghan (2016) and Reich and Byambaa (2019) agree
that increased minimum wages affect small businesses by
increasing labor productivity. On the other hand, CBC News
(2020) and Drucker et al. (2019) agree that higher minimum
wages create a burden to small businesses whose significant
portions of revenue are used on wages. Zipperer (2019) support
that minimum wages affect economic growth positively by
increasing employee purchasing power, while Meer and West
(2016) argue that minimum wages have negative impacts on
employment rates over long periods of time.
References
CBC News. (2020) “Is a $15 minimum wage bad for business in
N.L.? Depends who you ask”. Retrieved from
https://www.cbc.ca/news/canada/newfoundland-
labrador/stjohnsbot-pushing-back-against-15dollar-minimum-
wage-1.5467846
Chava, S., Oettl, A., & Singh, M. (2018). Do minimum wage

7. increases cause financial stress to small businesses? Evidence
from 15 million establishments (Working paper). Retrieved
from Atlanta:
https://pdfs.semanticscholar.org/9989/1cf3cdd2830f5539305479
ce7ccb0f76fd05.pdf
Drucker, L., Mazirov, K., & Neumark, D. (2016). Who pays for
and who benefits from minimum wage increases? Evidence from
Israeli tax data on business owners and workers (National
Bureau of Economic Research Working Paper 26571). Retrieved
from Cambridge: https://www.nber.org/papers/w26571
Ghani, N. (2016). The impact of minimum wage on small
businesses, workers, and employment in the United States.
International Journal of Humanities and Social Science, 6(10),
1-5.
Meer, J., & West, J. (2016). Effects of the minimum wage on
employment dynamics. Journal of Human Resources, 51(2),
500-522.
Reich, M., & Byambaa, U. (2019). Pasadena’s minimum wage
policy effects on workers, businesses and the local economy.
Pasadena: City of Pasadena.
Zipperer, B. (2019, February 7). Gradually raising the minimum
wage to $15 would be good for workers, good for businesses,
and good for the economy. Retrieved from
https://www.epi.org/publication/minimum-wage-testimony-feb-
2019/
Simon Fraser University
Econ 220W - Communication in Economics

8. Presentation
Instructions and Rubric
Students will deliver a presentation about their term paper. It
should be 10 minutes ± 1
minute. Presenters will be provided with a few days notice.
You must be ready to present on
short notice. You will be updating your presentations to reflect
the current state of your paper.
Students selected early in the cycle will most likely present
preliminary findings and direction
for their paper. Students selected late in the cycle will present
a full description of their project
and their ultimate findings from their research.
Presentation — 15 Points — Delivered March 30 - April 8
during lecture and tutorial
Instructions
Prepare a 10 minute (± 1 minute) presentation discussing your
topic and findings. You
must come prepared to efficiently begin your presentation.
Make sure that you have your
computer and the necessary adapters for the projectors; perhaps
you will need a flip chart stand.
Rubric
Set-up (1 point)
You are expected to set-up without any problems. Come
prepared.
Multimedia (2 points)

9. You will be graded on how well you use multimedia. You may
use a slide show, flip chart,
the white board/chalkboard, or tell an entertaining story.
Clarity of Economic Concept (5 points)
Present your economic concept clearly. It must make sense and
the detail must be
sufficient.
Best clarity (5 points) demonstrates clear relevance to the
topic, correct application of an
Best (5) Better (4) Good (3) Acceptable (1) Poor (0)
economic concept, theory, or model, and a clearly demonstrated
understanding of the economic
concept. The delivery and multimedia make it easy to
understand. Good clarity (3 points) is
missing two key characteristics of a best application. The
application may not be clearly
relevant, not correctly applied, or understanding may not be
demonstrated. Poor clarity (0 points)
is shown by a presentation that makes no sense.
Delivery (7 points)
The presentation should be delivered clearly at the proper pace.
At the end of the
presentation, ensure that you give students enough time to
organize their thoughts and ask
questions.

10. Best delivery (7 points) clear and gives people a chance to
absorb the information. The
multimedia complements the speech. There is adequate time to
ask questions at the end of the
presentation.
Best (7) Better (5) Good (3) Acceptable (2) Poor (0)