The Canadian Federation of Independent Business (CFIB) has released a report challenging the overall effectiveness of minimum wage policy in Canada, revealing that increases tend to hurt the very people they are supposed to help.
Contrary to groups that assert minimum wage increases do not adversely affect the whole economy, CFIB’s research report paints a very different picture on the potential job impact.
Minimum Wage: Reframing the Debate estimates that a 10 per cent increase in the minimum wage across all provinces costs up to 321,300 jobs.
In British Columbia, this could mean a loss of between 11,700 and 42,700 jobs. These job losses would take the form of hiring freezes, slower employment growth, or direct job cuts during economic downturns.
“At a time when the economy is in slow recovery, the last thing governments should be considering are policies that further hinder job creation,” said Marilyn Braun-Pollon, CFIB’s vice-president for Saskatchewan and co-author of the report.
Provincial minimum wage rates currently range from $8 in British Columbia to $10.25 in Ontario. British Columbia has not increased its minimum wage since 2001; however, this does not mean that market wages have been stagnant.
“The B.C. experience shows that wages for many entry level and low-skilled jobs will increase without raising minimum wages. However given the existing pressures impacting the B.C. hospitality industry, imposing further increases would have a significant impact on their bottom line,” said Laura Jones, CFIB’s vice-president for Western Canada.
“Is there a better way to help low wage earners? Several recent studies suggest that training and education can better help those permanently in low-wage jobs transition to higher paying positions. This combined with tax relief seems like a more effective, targeted way to help those most in need,” noted Jones. — CFIB
