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Public Consultation Session
Toronto - September 6, 2013

On September 6, 2013, the Minimum Wage Advisory Panel held a public consultation session in Toronto where they heard presentations regarding Ontario’s minimum wage policy from individuals and a number of organizations. The following represents a highlight of some of the comments that were heard during that session. The names of individual presenters have not been included.

List of Organizations Represented

  • ACORN Canada
  • Anglican Diocese - Social Justice and Advocacy
  • CUPE Local 4400 - Toronto Education Workers
  • Greater Oshawa Chamber of Commerce
  • Justicia for Migrant Workers
  • Migrant Workers Alliance for Change
  • Ontario Chamber of Commerce
  • Parkdale Community Legal Services
  • Social Planning Toronto
  • Support Enhance Access Services Centre
  • Toronto and York Region Labour Council
  • Workers' Action Centre
  • Unifor Canada

Highlights of Comments Received

Minimum wage policy - general comments

  • A fair minimum wage is a basic issue of justice. It needs to be high enough for workers to live on and level enough to ensure that paid work is a pathway out of poverty.
  • The minimum wage should be a good social policy. People should not have to rely on other mechanisms for social security.
  • There needs to be an understanding about why the minimum wage was introduced: to protect those who did not have bargaining power, and to address power imbalances for those at the bottom of the labour market.
  • Workers working full-time for a full year should not be living in poverty.

Profile of minimum wage earners

  • There is a rise in older workers making minimum wage, not only youths. In the last 9 years, older workers on minimum wage have jumped from 17% to 27%.
  • Live-in caregivers, migrant workers, and newcomers are mostly minimum wage earners.
  • Half of Ontario workers are working paycheque-to-paycheque. The minimum wage should lift people out of poverty, especially for those who work full-time for a full year.

Minimum wage rates

  • There is a need to implement an increase to the minimum wage that is economically feasible and takes into account the cost of living.
  • An increase in the minimum wage would give people more money to spend in their communities.
  • A full-time minimum wage earner makes $20,500 per year before taxes; an increase to $14 per hour would give these employees $2,500 more to spend per year.
  • The government’s policy regarding the minimum wage should create a minimum standard of living at the poverty line.
  • A “living wage” should be considered that also factors in the cost-of-living for a family with 2 full-time income earners.
  • Some presenters suggested the elimination of occupation-based exemptions to the minimum wage and differential minimum wage rates for students and liquor servers.

Factors the government should consider when determining minimum wage rates

Minimum wage and poverty reduction

  • The minimum wage is an anti-poverty measure and a benchmark for wage distribution, and it should be linked to the Poverty Reduction Strategy to help lift people out of poverty.
  • Ontario is experiencing an increase in low wage and precarious work in the service sector.
  • 1 in 10 workers are making the minimum wage; this number has doubled in the last decade.
  • Families do not have enough money to live on to afford necessities. People should be able to afford necessities and not live below the poverty line.
  • The current minimum wage is below the poverty line, according to many anti-poverty advocacy groups.

Impact of minimum wage on the economy

  • An increase to the minimum wage would create spending to boost the local economy, and add jobs to the sales and service sector.
  • A significant hike in the minimum wage would negatively impact both youth employment and overall employment.
  • Raising the minimum wage would benefit society in the long-term. Since low income earners spend all the money they make, an increase in wages would go back into the economy.
  • Any hike in the minimum wage will result in some sort of job loss.
  • Low wages provide an advantage to the individual employer but do not give any advantage to the economy overall. Lower wages leads to less consumer consumption (i.e. lower sales for businesses), causing a depressed economy.

Impact of minimum wage on business

  • Ontario’s competitiveness needs to be protected. Businesses need to be able to adjust to gradual increases so they can plan accordingly.
  • The retail and hospitality sectors, which employ more minimum wage earners than other sectors, have been hit hard by increases.
  • A living wage would stimulate economic growth.
  • Large businesses account for half of all minimum wage workers in Ontario.
  • Businesses have the following options to cope with a minimum wage increase:
    • Pass on the cost to consumers;
    • Absorb the cost increase through productivity gains; or
    • Accept that a greater share of revenue must be absorbed by workers.

Establishing a process for review

  • An ad hoc system for adjusting minimum wage is failing. It is not predictable for employers, and the purchasing power of employees does not remain constant.
  • An independent body that provides advice to the government would require a good governance structure and representation from businesses most affected by minimum wage.
  • A mechanism for regular reviews by an independent committee would be supported.
  • The government should consider a permanent independent advisory committee with research capacity, and engage in ongoing consultations with low-wage workers.
  • Some suggested that minimum wage should be increased annually; others suggested it should be updated every two years.

Tying minimum wage to economic indicators

  • Businesses need to be able to adjust their wages reasonably; an economic indicator (e.g. Consumer Price Index) is a predictable indicator.
  • A system tied to the Consumer Price Index would be favourable as it provides predictability and would eliminate long periods with no minimum wage increases.
  • 3 other provinces have tied the minimum wage to the cost of living.
  • Minimum wage should be set at 10% above the poverty line based on the Low Income Measure (LIM), calculated based on a 35-hour work week.
  • Minimum wage should be adjusted to CPI, federal income tax levels, and other government programs such as Old Age Security.
  • Minimum wage should be indexed to inflation.  Productivity and average wages should be considered as economic indicators in the future.