$10 wage fight grows Rob Ferguson, Robert Benzie, and Laurie Monsebraaten January 26, 2007 – The Star

It’s time to take the politics out of setting the Both Tory and Sorbara have warned that minimum wage by striking a commission to suddenly increasing the minimum wage to review the rate annually and possibly link $10 would force some employers to cut staff. increases to inflation, says The government has predicted, based on Progressive Conservative Leader . recent economic studies, that up to 66,000 Tory said he opposes the NDP’s push to jobs could be lost if it were raised to that boost the minimum wage to $10 hourly but amount. agreed the current level, rising to $8 next The finance ministry says the government has week, is too low. not commissioned or released any studies of Finance Minister Greg Sorbara told the its own on the impact of raising the minimum Toronto Star that Ontario’s “working poor” wage. Officials said yesterday they arrived at will get help from the province in the months the job loss figures after reviewing recent ahead but shouldn’t expect the minimum Canadian studies in academic journals that wage to rise to $10. found a 10 per cent increase in real wages can result in job losses ranging from 1 per cent to Tory called for any changes to the minimum 4 per cent, with a median figure of 2.5 per wage to be made after consultations with cent. The finance officials then estimated a business and social justice groups jump in the minimum wage to $10 would “We clearly need a better process than one cause job losses of between 21,000 and where, once in a while when a government 66,000. feels like it, they decide to adjust the A range of economists and social policy minimum wage,” he said. experts contacted by the Star yesterday Asked if minimum wage should be linked to agreed an overnight $2 hike to the minimum inflation, Tory replied “I’m not closed- wage would shake up the job market in minded to that” but stressed that any Ontario, but they weren’t aware of any increases have to be measured against their studies that back up the government’s job- impact on the broader economy. loss projections. NDP Leader Howard Hampton agreed with “There’s no question there would be some Tory that minimum wage should be linked to impact on employment levels, particularly inflation but said his idea of a commission to with such a big increase,” said social policy review the rate annually is “an attempt to consultant Richard Shillington, a statistician avoid the issue” of a $10 minimum wage. who worked on a 2006 Toronto task force on income security for low-income adults. “It’s not a living wage, it doesn’t need any more bureaucratic processes or study, it needs “But a lot of that would be what I call ‘sticker action,” Hampton said. shock,’ among employers,” he said, referring to a similar reaction consumers have to sudden price hikes. “The question would be poor and that includes adjustments to the to determine the true impact.” minimum wage based on a variety of factors, Since economists are split on how the including economic growth and rates of minimum wage affects jobs, Shillington and inflation,” Sorbara said. others say the way to settle the issue would be Simply raising the minimum wage on its own to strike an independent body to monitor the will be of “scant help” to the working poor impact. but Sorbara declined to discuss specifics, The government has released no information emphasizing any changes would have to to show that last year’s 30-cent increase in come in a provincial budget this spring. the minimum wage to $7.75 from $7.45 Sorbara is unlikely to take action until after caused any job losses, Shillington said. federal Finance Minister So instead of a modest 25-cent increase to $8 introduces his budget on March 20. next week, Shillington thinks the government Sources say there could be measures in the should try a 50-cent hike and use the federal budget to assist low-wage earners, commission to monitor what happens to jobs. such as an adjustment of the threshold for Douglas Peters, former chief economist for paying income taxes. TD Bank, also doubted the province’s dire If Ottawa moves in that direction, Queen’s job-loss projections. Park will almost certainly follow suit. “How do you affect the job numbers that Proponents of the $10 minimum wage note accurately? You have to put an awful lot of that just 29 per cent of low-wage jobs are in assumptions into the calculation,” Peters said small business with the rest at fast-food yesterday. chains, major retailers and other big Like Shillington, he also likes the idea of a employers with deeper pockets in an era of commission to track the impact of minimum growing corporate profits. wage hikes and thinks a 50-cent increase this Tory’s promise for a minimum wage review year would be a good start with annual 50- commission, possibly including welfare rates, cent increases after that. came in a speech to the Registered Nurses’ Association of Ontario, which supports a $10 The Liberals have already boosted the minimum wage 17 per cent in a series of minimum wage on the basis that income is a small raises since taking power in 2003 after key determinant of good health. the previous Conservative government froze His change in tack from opposing the $10 the rate at $6.85 for eight years. There has minimum wage could force Liberals to be been no discernible economic fall-out from more flexible on the issue with a provincial those increases. election looming in nine months, said “We are looking at a more comprehensive association executive director Doris approach to helping out Ontario’s working Grinspun.