Minimum wage increase lowers employment: CFIB

10-per-cent increase across country would lead to hiring freezes, 321,000 lost jobs
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 03/14/2011

 A 10-per-cent increase in the minimum wage across all provinces could cost the economy up to 321,000 jobs, according to the Canadian Federation of Independent Business (CFIB). Using data from Statistics Canada, Minimum Wage: Reframing the debate found job losses in the form of hiring freezes, slower employment growth or direct job cuts could total anywhere from 92,300 to 321,300 jobs.

“Raising minimum wage really does, in fact, hurt the very people it’s supposed to help,” said Marilyn Braun-Pollon, CFIB vice-president for Saskatchewan and co-author of the report. “When we see large jumps in minimum wage, it forces business owners to reduce hours, reduce training or eliminate jobs.”

When minimum wage increases, business owners are faced with significant payroll costs that force them to scale back, said Braun-Pollon. An employer matches dollar for dollar an employee’s CPP contribution, pays 1.4 times the employment insurance contribution made by the employee and pays workers’ compensation based on every $100 of assessable payroll, which all increase along with the minimum wage.