Ontario is taking a big step back by freezing minimum wage

Posted on in Policy Context

TheStar.com – Opinion/Editorials
Oct. 24, 2018.   By

It’s amazing what a government that styles itself as being “for the people” can accomplish in a few short months to make life just a bit more miserable for so many people struggling to make it in this province.

In August the Ford government cut a planned 3 per cent increase in social assistance payments in half and scrapped the basic income pilot project launched by the Liberals.

As it turns out, that was just the warm-up.

Now, with what it calls the Ontario Open for Business Act, the government has made it clear that the “people” it speaks for do not include those at the bottom of the heap who have been struggling for a share of the province’s growing prosperity.

The government says the new law will “create good-paying jobs with benefits.” In reality, it will do just the opposite by clawing back planned wage increases, rights and protections contained in the former Liberal government’s Fair Workplaces, Better Jobs Act, passed late last year.

That certainly isn’t good for employees, and as many economists have argued it isn’t good for the economy as a whole either.

Some of the changes come as no surprise. Labour Minister Laurie Scott, for example, had already made it clear that the minimum wage would not rise from $14 an hour to $15 in January, as it was set to do under the Liberals’ legislation.

But the new law goes a bit further than just cancelling the scheduled increase, which will deprive a person on minimum wage of about $2,000 a year. It actually freezes the provincial minimum wage at $14 until October 2020, instead of planning for it to rise with inflation. Starting in 2020, the wage will start to increase gradually, but it isn’t expected to reach $15 until January 2024 — a full five years after the current plan.

That leaves tens of thousands of low-wage workers further behind. And it ignores numerous studies that suggest providing workers with a decent wage puts more money into the economy, which in the long term benefits everyone.

Nor did a higher minimum wage destroy jobs overall. In fact, Ontario’s unemployment rate hit an 18-year low in July, dipping to 5.4 per cent six months after the last increase. The economy was clearly strong enough to absorb a higher wage for those at the bottom.

At the same time, higher minimum wages across Canada have helped to close the dangerous equality gap. A new assessment from the federal Parliamentary Budget Office this week concluded that increases in minimum wages have “contributed significantly” to narrowing the wage gap. That’s a huge social benefit.

The Conservative government’s new legislation contains other stings for low-paid workers, as well. It takes away the current two paid sick days employees were eligible for under the previous law, and even reduces the number of unpaid days they can access from 10 to eight.

That will simply encourage sick people to go to work, where they’re likely to infect others, reducing productivity and adding to health care costs if they end up in hospital.

Further, the new legislation also repeals the equal pay for equal work regulations, which required that casual and part-time workers doing the same work as full-time employees receive the same hourly wage. That will encourage employers to hire more people as temporary help and reduce the incentive to hire full-time.

The Ford government is justifying all this on the grounds that it’s necessary to cut “red tape that is driving jobs and investment out of our province.”

Falling unemployment and an influx of jobs into the GTA put the lie to that. This is not about creating jobs or being “for the people.” It’s about putting the boots to those at the bottom and it goes in exactly the wrong direction.

https://www.thestar.com/opinion/editorials/2018/10/24/ontario-is-taking-a-big-step-back-by-freezing-minimum-wage.html

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