Ontario Premier Kathleen Wynne’s plan to increase minimum wage to $15 an hour by 2019 may come as a welcome surprise to workers across the province, but businesses that already have thin margins may see it as an opportunity to eliminate jobs.
Karl Baldauf, vice president of policy and government relations for the Ontario Chamber of Commerce, said the increase to minimum wage could hurt young workers more than help them.
“Only three years ago the premier’s own minimum wage panel found that through research of Canadian examples every time you increase the minimum wage by 10 per cent it has the reverse impact of lowering youth employment by six per cent,” he said.
“It’s all well and good to hear these kinds of reforms, but unless you’re proceeding in a way that’s evidence-based, you’re making all of us vulnerable including those who are vulnerably employed who you’re seeking to help — and that’s why we’ve asked the government to proceed with caution.”
Baldauf said there is still time for the government to conduct more independent economic analyses on the major changes to Ontario’s workforce before it is introduced this week with second reading in the fall.
“The plan in place is to increase minimum wage by almost 25 per cent in a seven-month timeline. Ask businesses how they’re going to prepare for that,” he said.
“It’s going to put a lot of businesses, especially small businesses with very thin profit margins, in jeopardy — and that’s unacceptable. We need to ensure that we are enabling prosperity for all, that’s what fairness looks like, and what we’re seeing today does not reflect that.”
Chris Buckley, president of the Ontario Federation of Labour, told Global News the “long overdue” wage increase is a step in the right direction to help the more than 1.7 million Ontarians who make within $4 of minimum wage “get lifted out of poverty.”
“The employment landscape has changed dramatically over the last decade across Ontario. We lost hundreds of thousands of good paying full-time, steady jobs,” he said.
“Those jobs didn’t come back and they’re not coming back. So we’re left with a retail service sector economy in this province where workers are earning $11.40 an hour — you can’t survive on $11.40 an hour.”
Buckley said it’s no surprise the Ontario Chamber of Commerce is pushing back against the proposed wage increased, but businesses need to adjust to the changes or come to the table to find a solution with the workforce and the government before it is implemented 18 months from now.
“Workers have been getting the wrong end of the stick for far too long,” he said.
“Employment standards and labour law has not been reviewed in over 20 years in this province.”
Deena Ladd, coordinator for the Toronto non-profit Worker’s Action Centre that campaigns for non-unionized workers, said business federations such as the Ontario Chamber of Commerce are using “scare tactics” to drum up opposition to the minimum wage increase.
“Even in 2014, after the minimum wage had been frozen for four or five years and we had a little boost up from $10.25 to $11, they were screaming, ‘The sky is falling,’ and ‘Oh my God we can’t increase the minimum wage, that’s going to ruin us,’” she said.
“Well guess what? It didn’t ruin you.”
Baldauf said Ontario business have done ample work to create “good jobs” and the government needs to look at how the costs associated with increased wages and benefits can be offset in other areas such as the lowering of small business tax rates and corporate tax rates.
“Despite economic challenges the private sector in this province is doing its part and the notion that we have to be forced into it I think will only bring unintended consequences for those vulnerable, small businesses that are at the breaking point presently,” he said.
“We’re talking about them hiring fewer people. So the impact will not just be for business owners who will then be looking for jobs themselves, they will be for the people that they employ in communities across the province — especially for smaller communities.”
Baldauf said the government needs to look at how costs associated with increased wages and benefits can be offset in other areas such as the lowering of small business tax rates and corporate tax rates as part of so businesses can appropriately transition into the “new reality.”
Debora De Angelis, national coordinator for strategic campaigns with the United Food and Commercial Workers union, said an increase to minimum wage benefits the entire province — not just workers.
“Any additional money that workers are making goes back into the economy,” she said, adding that minimum wage increases benefit the economy more than corporate tax breaks that “disappear away from the country.”
“Any increase to the minimum wage, all of that money goes back into families — it goes to buying glasses for your children, it goes to buying uniforms for soccer, buying food for working families that haven’t seen an increase like this in a very long time.”
De Angelis said 60 per cent of minimum wage earners are women, so the wage increase also helps close the gender wage gap in Ontario.
“So women win, families win, because now the parents, the families, the working people who are making $15 an hour have money to spend on necessities,” she said.
“In the end, everybody wins and workers get a little bit of dignity in the workplace and I think that’s what’s been missing for a very long time.”