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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Business

Raise the minimum wage to $15/hr.

Premier Wynn, it is time to raise the minimum wage in Ontario to $15/hr.

On April 24, 2016 Governor Cuomo, the governor of New York state signed a statewide $15 minimum wage plan.

Mayor Murray of Seattle signed minimum wage legislation which provides for increase in the minimum wage in the city of Seattle to $15/hr phased in over time, beginning April, 2015. Large employers will start to pay $15/hr. minimum wage by January  1, 2017.

The city council of Washington D.C. had unanimously voted to raise the minimum wage to $15/hr by 2020.

In April of 2016, Governor Jerry Brown signed legislation which will raise the minimum wage in California to $15/hr by 2022.

The current minimum wage in Australia is $CAD 16.28/hr.

The minimum wage in Alberta will rise to $15 by 2018.

In Toronto, minimum wage is still 61 per cent less than the hourly sum needed by a working family to scrape by, the research by the Canadian Centre for Policy Alternatives shows.

And across the province, a full-time job at Ontario’s current minimum wage still leaves a worker around 20 per cent below the province’s low income measure — while in 1976, minimum wage brought workers just above it.

There is a misconception that only students work at minimum wage jobs. This is not true. According to study done by the Wellesley Institute, 40% of employees working at minimum wage were over 25 years old in 2011.

It is not right that somebody who works 40 hours a week has to live below the poverty line.

Andrea Horwath, the leader of the Ontario New Democrats has announced that she supports a $15 minimum wage in Ontario. On April 1, 2016, Andrea Horwath made a speech at the Broadbent Institute. In her speech, Andrea Horwath said:

“The time for talk is over. It’s time for Ontario to show leadership and will, and to make sure no one working full-time is stuck living below the poverty line. It’s time for a $15 minimum wage. And if the Liberal government won’t do it, then Ontarians will have an opportunity in two years to elect one that will.”

Premier Wynn, you have said “Social justice is what drives me; it’s why I’m here.” If you really care about social and economic justice, please raise the minimum wage in Ontario to $15/hr.

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