A 75-cent increase to Ontario’s minimum wage is a step in the right direction, but falls about $1.75 short of what workers need to escape the poverty cycle, says an official with the Lakehead Social Planning Council.
However, the president of the Thunder Bay Chamber of Commerce says a check-and-balance system is needed to ensure businesses can sustain future increases.
On Wednesday the province’s minimum waged jumped from $9.50 to $10.25. In 2004, after nine-years of no increases, it was $6.85.
Aaron Park, an LSPC social planner, said the latest bump up will help minimum-wage earners further distance themselves from the low-income cutoff line, which for a single person amounts to about $14,562 after taxes a year in 2005, the last census year. For a typical family of four, the number almost doubled to $27,532.
“Hopefully further increases down the road will also raise people out of that low-income bracket,” Park said.
However, until a knowledge-based economy takes over, the reality is more and more people rely on these types of jobs to survive, he said.
“The way that our local economy is going we’re losing a lot of our higher-wage, forestry related positions and a lot of the jobs that are coming in to fill that income or employment gap are more of the low-wage, minimum wage type jobs, so to have a higher minimum wage for people is important.”
He acknowledged that at some point further increases could have a detrimental effect, as companies look for ways to find efficiencies to cover increased payroll costs.
“It has to be balanced between the needs of local, small businesses that might be employing a few people. You can’t jump the minimum wage up maybe as quickly as it needs to be, because they have to survive as well, with them having to pay additional and climbing costs,” Park said.
“It’s important for people to make a living wage, of course, but it’s also important not to hurt local small businesses with the increases happening too rapidly.”
Chamber of Commerce president Harold Wilson said businesses have already absorbed plenty since the provincial Liberals started making minimum-wage increases six years ago. And while they were long overdue, from here on in he said the Ontario Chamber of Commerce would like to see increases regulated through an outside board.
“It needs to be transparent, it needs to take a look at economic factors. We know it was behind before. It hadn’t been increased for nine years apparently, before 2004. But we’ve had quite a number of increases over the past number of years. I think it’s been seven increases,” Wilson said.
“In the last six years we’ve seen on average more than one increase per year. What we’re saying is before they start to put in additional increases, they really need to get some input.”
Wilson said the commission should be a combination of business, labour and social groups.
“It can’t just be another dictate from the provincial government, which is just one more additional cost to business.
Wilson said businesses have been absorbing the costs for six years, but anything more will ultimately either be passed on to consumers or start to affect decisions when it comes to staff complements, part-time hires and summer student jobs.
“You’ve got to cover those costs,” Wilson said.
In 2008, the Ontario DP produced a report that indicated they’d like to see a $10.50 minimum wage, with increases tied to inflation.
Park said a slight increase on Wednesday’s benchmark, plus a tie to annual cost-of-living increases, would be ideal.
“I think if we could get it up to around the $12-mark, and then index it to inflation, we’d be doing pretty well,” he said.
