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  • Rob Snow

About the minimum wage...the skeptics are winning

Score one for the skeptics.

Those who questioned the wisdom of hiking the minimum wage so much, so fast are winning the debate, so far. The minimum wage is up and part time jobs are disappearing.

Five month ago The Bank of Canada warned higher minimum wages would mean 60,000 fewer jobs across the country. Early into the wage floor experiment, Ontario is setting a torrid pace.

Since we rang in the New Year and celebrated the living wage, 57,200 fewer people are toiling away in the fast food kitchens of the province. According to the latest jobs report from Statistics Canada, part time employment is down more than 4% since December.


Source: StatsCan Labour Force Survey Dec/2017


Source: StatsCan Labour Force Survey April/2018

What to make of it, since there are lies, damned lies and statistics? Ontario's population is slightly higher, its workforce is slightly lower. Full time employment is up since December, by 0.7%. The unemployment rate is holding steady at 5.6%. The glaring outlier is part time employment. And the biggest policy change affecting part time employment has been the politically driven decision to spike the minimum wage by 20%.

You don't have wear a tinfoil hat to think there might be a correlation.

If the higher minimum wage is to blame for the recent decline in part time employment, it was well telegraphed.

The Bank of Canada forecast "employment would fall by 60,000...consumption would decline because higher inflation would elicit a slight interest rate increase, which would more than offset the higher labour income."

The TD Bank called Ontario's plan to raise the minimum wage "bold". It also anticipated a "net job reduction in Ontario of 50,000 to 150,000 by the end of the businesses look to defray the higher labour cost by hiring fewer workers."

The province's FAO stuck a similar tone: "Ontario’s proposed minimum wage increase will result in a loss of approximately 50,000 jobs...with job losses concentrated among teens and young adults."

And the Canadian Centre for Economic Analysis warned the totality of Bill 148, with its maze of 64 labour cost reforms "would put about 185,000 jobs at risk over the coming years."

Is the minimum wage killing part time jobs? A lefty politician would never say so. An economist will always want more data. But so far this year, it seems the skeptics are winning.

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