Ontario: The New Minimum Wage is Killing Your Jobs

 

“These new policies will be a genocide on minimum wage jobs”

“A living wage” is what you hear from its supporters, “A genocide on employment” is what you hear from its critics. If you’re from Ontario then you know what I’m talking about. The Wynne Liberal government recently announced that the minimum wage would “gradually” increase to fifteen dollars an hour from eleven dollars and forty cents an hour. This has most people, even those not earning minimum wage, expecting an increase soon. The government of Ontario plans to increase the minimum wage to fourteen dollars an hour by January 1, 2018, then to 15$ an hour by January 1, 2019. That means that on January 1, 2018 Ontario will have a 22.8 percent increase in its minimum wage. As the Globe and Mail states it: “The largest one-year increase in the minimum wage rate of any province over the past two decades”. The implications of the new minimum wage, at least in my opinion, have been underestimated by nearly everyone. The results of this massive increase are going to be catastrophic. “Ontario’s Financial Accountability Office — an independent and impartial agency — published a report predicting 50,000 job losses due to the increase to $15 per hour”. This alone should be enough to persuade you that this increase is not only unnecessary but will be detrimental to the job market provincially. These job losses will not be construction labourers’ or landscapers’, they will be people like you. The issue when discussing minimum wage seems to be that those who earn minimum wage believe that their labour is somehow worth more. While that is a fair opinion to have, I can tell you that it simply is not true. I’ve worked several minimum wage jobs in my life, from floral delivery to pushing shopping carts at a grocery store, all when minimum wage was far less, and those jobs were barely worth what I was paid. There has also been a clear indication that the supporters of this policy think it will alleviate poverty, a premise that is also incorrect, the Financial Accountability Office has said that increasing the minimum wage is not an effective way to eliminate poverty.  

 

Let me tell you something, you will not see a proportionate wage increase if you already work a job at a rate at or greater than fifteen dollars an hour. It’s just not going to happen. The best illustration of that is found when considering how many people will now be working for minimum wage. The number of Ontarians paid the minimum wage would balloon from about 500,000 to 1.6 million. You did read that correctly, the number of people earning minimum wage is estimated to increase by more than a million, that means one of two things: either more than a million people won’t be seeing a raise, or there are that many people currently not earning the new minimum, which would have profound results. On this issue, the deeper you dig, the more abysmal things look. The Fraser Institute, an independent and non-partisan research institute, has this to say about the new wage: “the relationship between the minimum wage and median wage is often expressed as a ratio between 0 and 1. The higher the minimum wage increases relative to the median wage, the closer the ratio gets to 1, and the more likely there will be ‘severe adverse employment effects’ from further increases”. After the minimum wage increase, Ontario will have “one of the highest minimum wages in the world relative to the median wage a local economy can support”. This will be particularly hard for those in the grocery industry, an industry with notoriously small margins. Metro Incorporated is bracing for fifty million dollars in additional costs as a result, Loblaw Incorporated, another large grocer in Ontario, is preparing itself for 190 million in additional costs due to increases in both Ontario and Alberta. These bread and butter industries, no pun intended, are where plenty of people are employed and where plenty will soon be losing their jobs. On a more personal note, this wage hike has affected my own business. After five years of running a small landscaping business that is entirely student-operated, I’ve had to put a freeze on hiring and wages. After combatting some of the latest Liberal changes on the federal and provincial level this policy choice has been the final nail in my coffin. The Canadian Federation for Independent Business has stated rather furiously that they cannot support this minimum wage increase, especially without consulting business owners or considering the ripple effect this will have on small businesses. What once was a fight for a “living wage” has become something that will decimate jobs and increase the cost of living for everyone. There are clear and adverse effects to this new minimum wage. The Ontario Chamber of Commerce is yet another institution that has strong objections to this policy “These sweeping changes will tip our economic balance in a profoundly negative way”. I don’t possess the time or the words to describe exactly how angered the private sector is by these proposed changes. However, I do have an official prediction, these new policies will be a genocide on minimum wage jobs.  

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