Simone Smith
“If governments want to help low-skilled workers and people entering the workforce, they should implement policies, such as competitive tax rates, which help businesses grow and create opportunities for Canadians.” (Philip Cross, Fraser Institute)
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Their mission is to improve the quality of life for Canadians, their families, and future generations by studying, measuring, and communicating the effects of government policies.
Philip Cross (Senior Fellow at the Fraser Institute). wrote an article called, The Minimum Wage, Lost Jobs, and Poverty in Canada , which stated that wage increases do little to lower poverty rates and can actually hurt low-income workers, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
He noted that as an anti-poverty tool, minimum wage hikes are largely ineffective and can actually hurt the very people they’re supposed to help.
In recent years, all 10 provinces raised the minimum wage for workers—despite the realities of minimum wage policy. For example:
- Very few minimum wage earners (slightly more than one percent) work for more than five years at the minimum wage.
- Minimum wage increases can increase unemployment because businesses often respond by laying off workers, reducing work hours, and/or hiring less (or not at all). For example, after examining Ontario’s proposed 32 percent minimum wage hike in 2018 and 2019, the province’s Financial Accountability Office estimated employment would fall by 50,000 jobs.
- Minimum wage increases have little impact on poverty rates because most people who receive the minimum wage live in households that already earn higher incomes (i.e. the majority of minimum wage earners are young people living with their parents).
