Ontario’s Premier Kathlene Wynne was in the news this past week, with some hailing and others criticizing her announcement on the minimum wage.
The government said that they will phase in this increase over the next 18 months with the minimum wage rising to $14 by January 2018. It will be up to $15 by 2019.
Critics have said that raising the minimum wage will crush small businesses and destroy jobs, especially for young people in this economy that is already tough for them. They also said it will force businesses to raise their prices.
But economic experts point out that raising the minimum wage is actually good for business and it is time for change. Here are some reasons why:
According to Macleans Magazine, household purchases account for 57 per cent of Canadian GDP and helps to drive the economy. Rising housing costs across the country have eaten up a lot of disposable income for all Canadians. They pointed out that when lower income earners see a rise in their income they will spend it locally, boosting the economy from the bottom up.
Increasing wages has been shown to increase productivity in workers. A study from the Peterson Institute for International Economics found that higher wages motivate employees to work harder, leads to lower turnover, enhances quality of service and attracts more capable workers.
When it comes to larger business, those who support a higher minimum wage point out that low wages maximize profits for these big businesses. Macleans points out that big businesses complain about higher minimum wage, but don’t make the same statements about the growing compensation for senior management.
Ontario is not alone in there commitment to raising the minimum wage. They join Nova Scotia, Alberta, Quebec and Manitoba who has hinted a raise. Statistics Canada has found that Canada has outpaced the United States in its reliance on low wage work and Ontario has the highest reliance in Canada.