Yes, We Raised the Minimum Wage in Ontario. Here’s Why:
In January 2018, through The Fair Workplaces and Better Jobs Act, our government increased the minimum wage to $14.00 per hour, with a further increase to $15.00 per hour scheduled for 2019. Raising the minimum wage will have the greatest impact on the lowest-paid workers and is a key strategy to reduce poverty in Ontario and bring more people into the middle class. However, there have been concerns raised that it will negatively affect employers, and the broader economy, primarily through inflationary impacts as employers pass the increased wage costs on to consumers. That is why our balanced approach is so important in addressing this key election issue.
To start, let’s talk about why the minimum wage was raised. The minimum wage is the lowest wage rate an employer can pay an employee. Low wage work is concentrated in food services, retail, and industries like call centres and cleaning services. This increase will improve the lives of the one in four workers in Ontario who make less than $15 an hour. Right now, one in four people in Ontario are making less than $30,000 a year. A $15 minimum wage will have a dramatic impact on families across the province, especially on workers who have often been marginalized, including women, First Nations and Métis workers, immigrants and young employees starting to work. Even with these changes to the minimum wage, Canada will still not be among the highest minimum wage countries in the developed world.
As always, there has been a lot of negative news reporting and right-wing commentary about raising the minimum wage. Despite warnings of dire consequences these impacts are just not showing up in the economy. Much was made of the loss of almost 60,000 part-time jobs this past January. However, by February employment in Ontario increased and the unemployment rate remained unchanged at 5.5 percent. Overall, employment compared to the 12 months earlier was up by 114,000 (+1.6%) in Ontario. It is important to remember Ontario’s unemployment rate is the lowest in 16 years. Now is exactly the time to raise the minimum wage! Many economists have said that raising the minimum wage will have positive impacts on the economy. Higher wages would result in improved consumer purchasing power, which increases demand and improves economic growth. It’s hoped that increasing the minimum wage and the other proposed workplace changes will improve employee productivity, which is crucial to economic growth in the new service economy.
Nonetheless, employers, especially small businesses, may be having trouble paying staff and keeping up with all the changes in the workplace as outlined in the new legislation. Our government is keeping watch for negative impacts. Going forward, our government needs to ensure that everyone understands the importance of raising the minimum wage and develop a plan to work with small and medium businesses during the transition period. However, we are confident that these changes to the workplace are in keeping with larger-scale changes we see occurring to work, employment equity and the economy, both here in Canada and around the world. We are taking a balanced approach by phasing in the higher minimum wage. We strongly believe in that old saying – “a fair day’s wage for a fair day’s work”. Now is exactly the right time, to do the right thing, and raise the minimum wage!