Canada's Condominium Magazine

50,000 jobs lost after minimum wage increase? Financial Accountability Office (Ontario) cautions young people to be ready.

While the minimum wage increases, set to increase in increments, is good news for employees, the Financial Accountability Office (FAO: Ontario government’s watchdog) is warning there may be up to 50,000 jobs lost as employers reduce hours to compensate. Prices of goods will also likely increase by 0.5% (after inflation is removed). Impact on the housing market will be negligible, other than to keep adult children in the lest longer. Already, in Toronto, 56.3% of adult children live at home (well above the Ontario average of 42.1%. [Full story here>>]

 

 

Minimum Wage to increase to $15.00

The minimum wage is set to increase over 30%, from the current $11.40 to $15.00 by January of 2019. Why is Ontario government singling out younger works (15-24)? Their forecasters are predicting most of the loss will come in the younger demographics. There should be “minimal loss” of jobs to “young adults.” Currently, of the total number of people who earn $11.40 or less:

  • 38% are teen employees 15-19
  • 21% are young adults 20-25
  • 40% are adults 25 and older. [1]

One of the hardest hit sectors will be seasonal, grocery retail, casual labour — where young adults and teens are commonly employed at minimum wage.

The other negative impact of the new wage will be the number of people listed on minimum wage. The percentage of the population on minimum wage will increase as people already earning $15.00 per hour will then be included.

Currently, 520,000 employees receive minimum wage, or 7% of the population. With the increased level, FAO projects the number will increase to 1,610,000, or 22% of the population.

Postive impact of wages on spending

The increased wages will have lifestyle benefits for those still employed and will increase disposable income for many. Spending should increase.

NOTES

[1] Statistics Canada Labour Force Survey

 

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