After seven consecutive increases, the Ontario government has announced the minimum wage rate will remain at $10.25 per hour in 2011, the highest provincial minimum wage in Canada.
The province started implementing annual increases early in 2003 and the minimum wage has increased by 50 per cent with annual increases in the last seven years. These increases outpaced inflation in part to make up for a nine-year minimum wage freeze between 1995 and 2004.
"Ontario families deserve a fair wage and our businesses need stability and certainty,” said Charles Sousa, Ontario’s minister of labour. “We're striking the right balance with a fair minimum wage, help for workers who need training support to find a job and tax relief for families as well as 10 per cent off electricity bills."
In the fall of 2011, the government will appoint a committee representing both business and workers to provide advice on the minimum wage in advance of the 2012 budget.
Minimum wage increases tend to hurt the very people they are supposed to help, as large increases force business owners to reduce hours, reduce training or even eliminate jobs, according to a new report by the Canadian Federation of Independent Business (CFIB).
It found a 10-per-cent increase in the minimum wage across all provinces would cost up to 321,300 jobs. These job losses would take the form of hiring freezes, slower employment growth, or direct job cuts during economic downturns.
However, the CFIB’s estimate of job losses is based on elasticities from studies that found significant negative impacts on employment and discounts many studies that have found very small impacts, according to Andrew Jackson of the Progressive Economics Forum. The Organization for Economic Co-operation and Development has found the effect of minimum wage increases on adult employment is very small, he said, and minimum wage increases reduce the gap between lower and middle income workers, promoting greater equality.
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