Business, Economics, Job Market

Ontario’s job losses and the raise in minimum wage

Yes, Ontario did lose 51,000 jobs in January 2018.  The minimum wage in Ontario also rose to $14/hr in January 2018.

I keep hearing in the news that these job losses can be attributed to the rise in the minimum wage.

It does look that way if you just look at the 51,000 figure. The 51,000 job lost were all part-time jobs.

But once you dig into the numbers, it becomes very difficult to conclusively say that the job losses were caused by the rise in minimum wage.

First of all, you cannot make a good analysis based on just one month of data.

Let’s look into January 2018 numbers anyway.

On a percentage basis, part-time jobs lost were:

Ontario                       -4.3%

Quebec                       -3.9%

Saskatchewan          -4.8%

New Brunswick       -4.1%

As you can see, Ontario’s part-time job losses on a percentage basis were not that bad when compared to Quebec, Saskatchewan and New Brunswick.  Saskatchewan actually lost more part-time jobs on a percentage basis than Ontario.

The percentage is calculated by dividing the number of job losses by the total number of part-time workers.

If you look at the different sectors of the economy where the job losses occurred, you  will notice an interesting fact.

You would have expected job losses in the Accommodation and Food Services sector where 60% of the workers earned $14 or less. However, there were 2,200 more jobs created in this sector in Ontario.

Also it is important to note that 44,000 jobs were lost in industries that have small numbers of low-wage workers.

The 44,000 drop in service sector employment included:

professional, scientific and technical services (-13,300)

public administration (-5,600)

educational services (-8,100)

health care and social assistance (-9,700).

Sources:

Bloomberg. Blame Ontario minimum wage hike for job plunge. Or not.

Canadian Center for Policy Alternatives. Ontario January job numbers: Keep calm and carry on.

Statistics Canada. Labor force characteristics by province.

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