60,000 job losses by 2019 due to minimum wage increase: Bank of Canada
OTTAWA – The Bank of Canada estimates there will be about 60,000 fewer jobs by 2019 due to the increases in minimum wages across the country, but that labour income will be higher due to the increases.
In examining the impact of the wage increases, the report estimated that the consumer price index could be boosted by about 0.1 percentage points on average and real gross domestic product could be cut by 0.1 per cent by early 2019.
The number of jobs lost was based on a 0.3 per cent decline in the number of hours worked, while aggregate real wages were estimated to increase 0.7 per cent.
The research paper by the staff at the central bank noted that if the average working hours declined following the increase in the minimum wage, the number of jobs lost would also be lower.
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The Bank of Canada estimated that about eight per cent of all employees work at minimum wage, a proportion that increases to 11 per cent if a threshold of five per cent above minimum wage is used.
Ontario raised its minimum wage to $14 per hour on Jan. 1 from $11.60 and plans to increase it to $15 in 2019, while Alberta is expected to raise its minimum wage to $15 later this year.
© 2018 The Canadian Press