Calls for Minimum Wage Increase to $15: What Does this Mean for Employment Rates?

In 2014, Ontario’s minimum wage was increased from $10.25 to $11 per hour, after being frozen for four years. In October of this year, it will be hiked up to $11.25. Members of the federal New Democratic Party and others who support their stance argue that this is simply not good enough – and a provincial movement is under way to bring Ontario’s minimum wage to $15 an hour.

Minimum Wage and the Poverty Line

As noted by Waterloo Regional Labour Council President Mark Xuerob, $11.25 per hour still puts a full-time Minimum Wage - Ontario Staffingemployee who works 40 hours a week at 17 percent below the poverty line. By comparison, a minimum wage rate of $15 an hour would raise them to 10 percent above the line.

  • Rallies organized by the Alliance Against Poverty and supported by the labour council began last month. On May 15, organizers with Fight for 15 & Fairness began meetings with MPPs across Ontario to bring their message directly to them.
  • The New Democratic Party last summer pledged to implement a $15 minimum wage for all federally regulated workers. This move will benefit approximately 100,000 Canadians and brings the issue to the forefront in light of the upcoming October federal election.
  • The minimum wage debate is part of a larger picture. Proponents also want to promote permanent, full-time jobs; require businesses to give employees at least five sick days per year; protect workers from unfair dismissal; make it easier for employees to join unions; and prevent employers from delegating responsibility for workers’ rights to temporary agencies or subcontractors. A recent United Way study showed that 41 percent of jobs in Toronto are

part-time or contract positions, and this rate is growing across the province.

The Impact on Businesses and the Economy

Xuerob calls the campaign for a $15 minimum wage “an economic development strategy,” reasoning that the outcome would mean extra money earned by workers would be spent in their local communities. As a result:

  • Overall employment would be stimulated and the economy strengthened. Consumer and household spending supports more than half of Canada’s total economic output. In recent years, workers have relied increasingly on credit cards and bank loans, a trend that cannot keep the economy healthy for the long term.
  • Corporate tax cuts have not produced the jobs that many expected. If companies lack the customers to buy their products and services, they’re unlikely to produce more, even if they’re making a profit. Companies that rely on their low pay structures may feel the pinch of a higher minimum wage, but the best employers will benefit and even be able to expand. As long as the law is enforced, both employees and employers will be protected.

To learn more about this and other developments affecting Ontario employment, read our related posts or contact Employment Professionals Canada today.