The Ontario government’s decision to not raise the hourly minimum wage by an additional one dollar in January has been met with relief from the local business community.
But anti-poverty advocates say the announcement is disappointing.
Increases made to the minimum wage have never been about the dollar amount, businesses are more concerned with the unpredictability of how governments have been rolling them out, said Kithio Mwanzia, president and CEO of the Guelph Chamber of Commerce.
Business owners have had to contend with dramatic jumps in the minimum wage after years of freezing the rate by governments over the past few decades.
Mwanzia said the business community understands the minimum wage must go up, but would like to see it done in a more measured and predictable way and tied to growth in the economy.
“In general, businesses will not contend with the number, per se. It’s the unpredictable nature of how they can forecast labour costs is what a number of businesses have taken issue with and we took issue as a chamber of commerce,” said Mwanzia.
Businesses had about six months to prepare for the last increase in the minimum wage when it jumped from $11.60 an hour to $14 in January of 2018 as a result of the passing of Bill 148.
Mwanzia said that was too much too soon for many businesses.
“There’s no business that has 30 per cent more value to extract from their company, and that’s what we saw with the implementation of (Bill 148) in the pace of time that the previous government implemented it,” said Mwanzia.
On Wednesday, Ontario’s Labour minister Laurie Scott announced the PC government will halt the $15 minimum wage, which was to be implemented January 1.
“The announcement is one that I think the business community is going to view as a positive one, but it does not solve the problem of unpredictability in the setting of minimum wage,” said Mwanzia.
Dominica McPherson, assistant coordinator for Guelph and Wellington Task Force for Poverty Elimination, said the government’s announcement is disappointing.
Low-wage workers tend to spend the money they receive through increases in the minimum wage, helping to grow the economy, said McPherson.
“Any increases to the minimum wage provides low-wage workers with the capacity to put increased funds toward their basic needs, like housing, food, utilities and those stable pieces people need to be able to thrive in their community,” said McPherson.
Wage increases also mean healthier workers, she said. An increase in wages may mean a worker can spend money on medications and dental care that they may skip on to fulfil their basic needs first.
“We are particularly concerned about the health and well being of workers in their lives and ensuring they have fair wages and fair working conditions to support that,” said McPherson.
She said a campaign promise made by premier Doug Ford to eliminate income tax for minimum wage earners will not have the same impact as an increase in the minimum wage.
A one dollar increase in minimum wage results in about $2,000 a year for full-time minimum wage workers, McPherson said. Many workers earning minimum wage pay little or no income taxes.
“If we are talking about dollars in pockets, an increased minimum wage will have a much greater impact for low-wage workers,” said McPherson.
Many full-time, low-wage workers in Guelph still have difficulty making ends meet, said McPherson. Some of them work multiple jobs.
“We also know that a job is not necessarily a pathway out of poverty,” she said.
Six months after the last minimum wage hike was implemented, Ontario experienced its lowest unemployment rate in 18 years.
Mwanzia said businesses take a long-term look at their competitiveness, not a one month snapshot.
“It’s too soon to make some correlative argument to say nothing happened, so it must be fine,” said Mwanzia. “The story arc of business is not one that is evaluated on a one-month timeframe.”
He said the chamber will continue to advocate for a more predictable mechanism for increases in the minimum wage.
““Our advocacy has never been about any particular number, because that is not really what the discussion is about. It is about long-term cost predictability for businesses and how that can impact competitiveness.”
