$15 wage law could cost 50,000 jobs, says re­port

Your es­sen­tial daily news Pace and de­gree of the hike is un­prece­dented, watch­dog says

Metro Canada (Ottawa) - - Front Page -

More than 50,000 peo­ple could lose their jobs if the On­tario gov­ern­ment goes ahead with its plan to raise the min­i­mum wage to $15 an hour by 2019, the prov­ince’s financial watch­dog said Tues­day in a re­port that as­sessed the eco­nomic im­pact of the pro­posed in­crease.

The job losses would be con­cen­trated among teens and young adults, while the num­ber of min­i­mum wage work­ers in On­tario would in­crease from just over 500,000 to 1.6 mil­lion in 2019, the Financial Ac­count­abil­ity Of­fice said in its re­port. FAO chief econ­o­mist David West said the prov­ince is en­ter­ing “un­charted wa­ters’’ with the in­crease be­cause no other ju­ris­dic­tion has gone so far so quickly.

While the move will have a pos­i­tive im­pact on the prov­ince’s to­tal labour mar­ket in­come — hik­ing it by 1.3 per cent — it will also re­sult in job losses over a num­ber of years.

“There’s ev­i­dence to sug­gest these job losses could be larger given the mag­ni­tude and rapid pace of this in­crease,’’ West said.

In July, Premier Kath­leen Wynne an­nounced her gov­ern­ment would in­crease the min­i­mum wage to $15 an hour by Jan. 1, 2019. The in­crease would be phased in grad­u­ally and would rise with in­fla­tion, as sched­uled, from $11.40 cur­rently to $11.60 in Oc­to­ber, to $14 an hour on Jan. 1, 2018 and $15 the fol­low­ing year.

West said that while the FAO re­port makes no rec­om­men­da­tions about the pro­posed pol­icy, it does raise red flags for leg­is­la­tors. The re­port specif­i­cally sites the speed with which On­tario will phase in the change as a con­cern for busi­ness, he said. The pro­posed changes are in re­sponse to a gov­ern­ment­com­mis­sioned re­port re­leased last week that in­cluded 173 rec­om­men­da­tions ad­dress­ing pre­car­i­ous work. The Chang­ing Work­places re­view con­cluded that new technology, a shrink­ing man­u­fac­tur­ing sec­tor and fewer union jobs, among other fac­tors, have left ap­prox­i­mately one-third of On­tario’s 6.6 mil­lion work­ers vul­ner­a­ble.

Labour Min­is­ter Kevin Flynn said Tues­day that be­cause of the prov­ince’s strong econ­omy the gov­ern­ment can move for­ward with the min­i­mum wage in­crease.

He pointed to stud­ies writ­ten in re­cent years by the Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment, the Cen­ter for Eco­nomic and Pol­icy Re­search and the Cana­dian Cen­tre for Pol­icy Al­ter­na­tives that sup­port the move.

“This money (peo­ple are) going to be mak­ing goes right back into the econ­omy,’’ Flynn said. “This doesn’t go into trust funds or this doesn’t go off­shore. This goes right back to Main Street.”

DAVID Slater/peta

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