The Canadian province of Ontario raised minimum wage in January. The hike went from $11.60/hour to $14/hour. How are business responding? Yikes.
Per Financial Post:
The Bank of Canada estimates there will be about 60,000 fewer jobs by 2019 due to the increases in minimum wages across the country, but that labour income will be higher due to the increases.
In examining the impact of the wage increases, the report estimated that the consumer price index could be boosted by about 0.1 percentage points on average and real gross domestic product could be cut by 0.1 per cent by early 2019.
The number of jobs lost was based on a 0.3 per cent decline in the number of hours worked, while aggregate real wages were estimated to increase 0.7 per cent.
Some restaurants, including Pizza Hut and Subway, have came out and told their customers that prices will be rising. They even told the customers that the reason the prices are going up is because of the minimum wage hike.
Per Daily Wire:
According to Aaron Aerts and Laura Jones of the Canadian Federation of Independent Business,“The negative impacts will ripple throughout the economy: layoffs, reduced hours and fewer opportunities for young workers; higher prices for consumers; increased automation; and reduced investment. Pretending these impacts don’t exist is fa-la-la-la-la economics.”
A survey by the Canadian Federation of Independent Business is reporting that over 50% of small businesses are going to be raising the price of products and services in response to the wage hike. Additionally, over 50% of small business employers have already made plans to not hire any new employees for the year, while over one quarter of small businesses will be reducing the amount of staff currently hired.
Even more staggering, only 33% of small business owners have proactively responded to the minimum wage hike. In other words, the minimum wage increase is serving its intended function for only one-third of small businesses in Canada. Small and medium-sized businesses employ over 90% of Canadians in the private sector.
Despite this failing new policy, Ontario plans to take the minimum wage to $15/hour by the year 2019. Will the issues that are being caused by the previous hike keep this from happening? Probably not, sadly.