Job market will balance out after wage hike: Brock prof
Although labour groups say the 83,000 new jobs Ontario gained in the months since the minimum wage reached $14 an hour is proof the increase has not killed jobs, a Brock University economics professor says the full impact of the increase has yet to be seen.
Felice Martinello said Premier Doug Ford’s assertion that “no legislation in Ontario’s history has killed more jobs than Bill
148” is not accurate either.
“It’s clear that there are positive and negative effects from the minimum wage and everyone should just grow up and recognize that — that there’s no unambiguously good or unambiguously bad public policy,” Martinello said. “All of them will have positive effects and some negative effects.”
But the negative impacts of giving a raise to Ontario’s lowest-paid workers are often outweighed by the benefits, he said.
The provincial NDP’s employment, jobs, research and innovation critic and Waterloo MPP Catherine Fife issued a media release saying Statistics Canada’s Labour Force Survey shows Ontario gained 83,000 jobs in the months since the minimum wage was increased and paid sick days were introduced for workers at the start of the year.
The province has recently moved to scrap a planned minimum wage hike to $15 an hour at the start of 2019, leading to recent protests throughout the province including Niagara.
“Ford’s administration is not creating jobs — but nothing that Ford is planning to take away, like sick days for workers, is costing the province jobs,” Fife said in the release.
Martinello said the previous Liberal government did move the minimum wage up “substantially and quite quickly,” and it will have an impact on employment.
“Even progressive economists will admit that if the minimum wage is higher there are going to be fewer jobs than there used to be,” he said.
But that doesn’t happen overnight.
“Over time, employers will adjust to the higher wage,” Martinello said.
For instance, employers could focus on less labour intensive
products, introduce more automation or reduce the number of stores if they begin to pay more attention to labour costs.
It could also lead to less on-thejob training, which also adversely effects young workers by eliminating opportunities to gain experience.
However, Martinello said the number of jobs available “is not super responsive to the wage.”
If, for instance, the minimum wage goes up by 10 per cent, “you might lose three per cent employment, but not nearly 10 per cent.”
But ultimately, Martinello said, if the idea of increasing the minimum wage is to bring people out of poverty, there are better ways of accomplishing that goal.
“To me, why mess with the labour market to eliminate poverty? If there are poor people who you think need help, just give them money,” he said.
For example, he said, increasing tax credits for low income workers could be a better way of accomplishing that goal.
The basic income pilot project which provided payments to 4,000 low-income people in Hamilton, Brantford, Thunder Bay and Lindsay — also scrapped by the Ford government soon after it took power — is another example.
“Instead of messing around with the labour market … let the labour market work out the way it’s going to go, and use universal basic income to help people,” Martinello said.