Minimum Wage to Rise, Liberals to Fight Child Poverty Robert Benzie Mar 21, 2007 – the Toronto Star
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Minimum wage to rise, Liberals to fight child poverty Robert Benzie Mar 21, 2007 – The Toronto Star The Liberal government will ramp up the When asked about an immediate jump minimum wage to $10.25 by 2010 in a yesterday in the Legislature, McGuinty said, provincial budget tomorrow that has been “just as it would be irresponsible to hold the designed to help Ontario’s poorest children minimum wage at $8 an hour indefinitely, it and their families. would also be just as irresponsible to raise it to $10 an hour overnight.” The minimum As first disclosed in the Star this morning, the wage was $6.85 an hour in 2003 when the $8 hourly wage will rise to $8.75 next year, Liberals formed the government. They have $9.50 in 2009 and $10.25 in 2010. gradually increased it to $8. Premier Dalton McGuinty acknowledged The study to be released by Sorbara will warn today that the Liberals’ final budget before that 90,000 to 180,000 jobs could be lost if the Oct. 10 election “will bring a focus to the the minimum wage is increased by 25 per fact that nearly a million children are growing cent in one fell swoop. up in Ontario in poverty.” Sorbara commissioned University of Toronto “That’s an issue of concern to all of us and professor Morley Gunderson to study the particularly it’s become more pronounced impact of a $2 hike. given that we now fully understand that many of these kids are showing up for school and Gunderson, paid $24,000 for a sobering 50- they are not ready to learn…it compromises page report that took him six weeks to our ability to build a strong, competitive complete, found such a dramatic rise in the economy,” McGuinty told reporters. wage could cost even more jobs than the 66,000 the finance ministry had estimated. “So it’s in everybody’s interest that we find better ways to address the needs of children “A 10 per cent increase in the minimum wage growing up in poverty in Ontario.” would give rise to about a 3 per cent to 6 per cent reduction in employment,” the professor Finance Minister Greg Sorbara, who took said in an interview. time off this morning to go to an East York daycare where he read to children the story “So a 25 per cent increase, then just multiply “The Little Engine That Could,” to those adverse employment effects by two and underscore the budget theme, will make it a half. In fact, it could be worse in the sense official in the Legislature at 4 p.m. tomorrow. that the very limited evidence suggests that the response to a big increase is actually quite The decision to increase the minimum wage a bit greater than the response to a series of comes after weeks of pressure on the smaller increases of the same magnitude,” he government from poverty activists and the said. New Democrats. In other words, an immediate $2 increase The cautious approach will be backed by a could translate into a 7.5 per cent to 15 per study to be released by Sorbara that warns of cent decrease in jobs. With 1.2 million heavy job losses if the government were to Ontarians earning $10 an hour or less, that immediately increase the minimum wage to could spell the loss of between 90,000 and $10 an hour. 180,000 jobs. But Gunderson emphasized that doesn’t mean “Phasing it in over three years is not good existing jobs would necessarily vanish, enough,” she said, noting Liberal and because the economy is growing. Progressive Conservative MPPs hurriedly rammed through 25 per cent pay hikes for “It’s not that those jobs are lost, it’s just that themselves just before Christmas. those jobs are not there now that would have been there,” said the professor, one of “We saw them giving themselves a raise in Canada’s leading labour market economists. eight days, so they can certainly do as well as that for the poorest members of our working “It will hurt the growth of employment. In a public,” she said. growing economy that tends to be absorbed, but it does mean slower job growth for young DiNovo added it was “absolutely nonsense” people,” he said, noting teenagers and people to suggest a 25 per cent rise in the minimum up to the age of 24 would be hurt most. wage would have catastrophic consequences for the job market. “That’s the group that will be affected. Very few people beyond that are at the minimum “This is just a scare tactic, really, to talk about wage. It really is a teenage and youth lost jobs. No, that won’t happen.” phenomenon.” The minimum wage issue has become a Outside the Legislature yesterday, a small difficult political problem for the Liberals. gathering of demonstrators rallied for an Last month, the governing party lost a by- immediate $10 an hour wage. election in York South-Weston, once one of At the rally, NDP MPP Cheri DiNovo the safest Liberal seats in Ontario, when New (Parkdale-High Park), who is pushing private Democrat Paul Ferreira toppled a McGuinty- members’ legislation for a $10-an-hour anointed candidate, Laura Albanese. minimum wage, said poor people need help With a provincial election on Oct. 10, the sooner rather than later. Liberals are concerned about their left flank, “If they phase it in, really they’re just phasing which is why tomorrow’s budget is designed in another era of poverty for ... Ontario’s to steal some of NDP Leader Howard lowest-paid workers. We need it now. This is Hampton’s thunder. catch-up, this is not really a raise,” said DiNovo. .