The Canadian Emergency Response Benefit

Much to the Federal Government's credit when we all went in lockdown on March 13th to ensure that people who now suddenly found themselves without work they set up the CERB so these people would get $500 a week for the next 16 weeks or until their place of work reopened.

It has been very popular and much needed for many people who found themselves suddenly without income. But now as things start opening up some employers are having difficulty hiring people because they like getting the $2000 to sit around at home. They are complaining that people are taking advantage of the CERB because for some it is more than they were making at their job before the lockdown.

Even some premiers are complaining about the CERB, you know the ones who own that big house all paid for at the end of the street.

So I decided to make some calculations to see if their criticisms and concerns are justified.

Back in 1976 I worked at Humpty Dumpty in Montreal full time afternoon shift which paid 25 cents more an hour. I made $3.75 an hour. I worked 40 hours a week. Then according to my calculator I grossed $150 a week. In today's wages taking inflation into account that is the same as making $641.38 a week. Now hourly that is about $16.00 an hour based on a 40 hour work week. Our minimum wage right now in Ontario is $14.00 an hour.

But here is the real kicker. The buying power of that $150 according to inflation Canada website gets you $33.21 of goods and services nowadays. Now that $33.21 goes into $150 4.5 times. So right now I would need to make $677 a week at Humpty Dumpty or about $16.95 an hour just to buy the necessities. This probably does not even include rent or utilities.

My guess is I wouldn't make that today at Humpty Dumpty. It was basically a minimum wage job.

Now getting back to the CERB people are getting $500 a week. Based on a 40 hour week which most people do not even work anymore especially in the service industry that comes to $12.50 an hour.

Now if you are single and you make $500 a week and you rent a bachelor suite which is the smallest accommodation someone could live in unless they live at home still with their parents you cannot find anything less than $1200 a month and in the big cities up to $1800 a month.

Not only that but these payments in your next tax return people will pay 30% on each $500 payment. So if you were getting taxed right off the hop you would be clearing $350! Taking into account inflation that was worth $1496.55 a week back in 1976.

What needs to done is one of two choices.

1. The people who cannot find anyone to work must all collectively raise their wages. Either the government has to raise the minimum wage to I would suggest $20 an hour or the employer has to pay more. This would be passed on to the consumer who would have to pay more but then they should be making more as well. Stop hiring part-time and start hiring full time. You want people to work for you then pay and maybe throw in some benefits as well. This will cause inflation to rise of course but rather than risk inflation going down suffocating the economy paying people more may in fact stimulate the economy. People may even save money rather than charge everything and accrue more debt. In Scandinavia it cost $12 to buy a beer at a club but you never see poverty there. Everyone has full time work and benefits and high standard of living. No one is left behind.

or

2. If wages remain unbearably low and employers want to be cheap then the government will introduce Guaranteed Basic Income for everyone. Wealthy and poor it doesn't matter. That will also stimulate economy and give people a head start each month. Do not pay enough that people sit at home and make it taxable too. We do not want people to get lazy. Maybe the extra dollars will allow people to retrain or do something else that is useful with it.

There that is what I got to say.

The pandemic has shone a light on a lot of things but thinking that some people think they are making more collecting $500 a week sitting at home is mind boggling. Like really their former employer should be ashamed of themselves. Pay more and charge more. Maybe it may make the consumer stop and think before impulsively buying something.  I mean we see hairstylists charge more on the hair cut now because of cleaning supplies maybe also make it higher and give your employee a dollar more an hour?


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