Ontario Premier Kathleen Wynne announced a rise in the provincial minimum raise, from $10.25 to $11 per hour, to take effect on June 1. Future increases will be tied to the rate of inflation and will occur each October 1st. The amount of the increase will be announced six months before it takes effect each year. The plan to index the minimum wage increase to the cost of living may prevent future jumps in the wage and be less jarring to employers.
Proponents look to the wage increase measure to reduce Ontario’s poverty rate and boost the economy. Studies indicate that lower income workers who typically live paycheque-to-paycheque spend salary increases immediately to cover living expenses – creating an immediate positive impact to the local economy. Financially better-off employees tend to bank their raises, especially when they are worried about the state of the economy, which does nothing to aid economic recovery.
Ontario’s minimum wage has been frozen since 2010 while the price of gas, rent, groceries, hydro have all increased. The increase is thought by many to be long overdue or inadequate. Wage increase supporters point to the recent report by the Canadian Labour Congress which noted that even after various subsidies and tax cuts corporations are holding onto revenue surpluses rather than creating new jobs.
Opponents of the measure worry that the increase could lead to job loss and reduced hours for existing workers while crippling job growth efforts. Reportedly, some large retailers are already cutting jobs. Experts note that hiring slowdowns could hit young people especially hard, especially with summer hiring season right around the corner.
Increases in the minimum wage are likely bump up wages across the board, possibly driving small to medium employers – who are already operating on razor-thin margins – out of business altogether.
How can a staffing firm help your business deal with wage hikes?
- Right-size your staff – lower your headcount and bring in additional help only when you need it.
- Expand your business or accept new projects without hesitation – knowing that you can provision talented staff as needed to meet increased demand.
- Hire more carefully by allowing employment professionals to assume your hiring process. Avoid the risk of bad hires when you can least afford it
To find out more about how staffing can help your business handle economic ups and downs, contact the experts at Employment Professionals Canada today.