How much should Ontario’s minimum wage go up?

As Ontario gets ready to go to the polls June 2, the Star looks at where the parties stand on the issues that matter to voters. Today, we look at the minimum wage.

There might not be many things Ontario’s Liberals, New Democrats, Greens and Progressive Conservatives agree on, but at least in principle, raising the province’s minimum wage is one of them.

But by how much, and when? Those are where the parties differ.

The PC party is offering a 50 cent per hour jump to $15.50 this fall. The Liberals, NDP and Greens say they’ll move it to $16 an hour this year. In addition, the NDP says it would raise it another dollar per year, to $20 by 2026. The Green Party, meanwhile, would provide annual $1 increases, and a living wage top-up in regions with a higher cost of living.

It is no surprise, says workers’ rights activist Deena Ladd, that a minimum wage hike is shaping up to be a major election issue, given spiralling inflation in the wake of the COVID-19 pandemic.

“I think the parties are very much hearing at the doorstep that people are having a hard time making ends meet,” said Ladd, executive director of the Workers’ Action Centre. “I think they know that if they’re going to get some popularity at the polls, they’ve got to say something.”

In March, the most recent month for which numbers are available, the consumer price index — the official gauge of inflation — rose 6.7 per cent from a year earlier, Statistics Canada reported.

The prices of pretty much everything that makes up the CPI — including food, energy and household goods — were higher.

That kind of inflation makes a wage hike imperative, argued Leila Sarangi, national director for Campaign 2000, a coalition of groups working to end child and family poverty.

“We need a minimum-wage increase, and we need it immediately. This can’t be a one-time, year-over-year increase. The living wage in Toronto is $22 an hour, so we’re pretty far off of that mark,” said Sarangi, referring to the Ontario Living Wage Network’s assessment that a living wage in Toronto is $22.08 an hour. “People living in this province deserve work to be a real pathway out of poverty.”

An increase of a dollar or two to the minimum wage won’t keep many low-wage workers from sliding into — or remaining in — poverty, especially if inflation remains high, Sarangi argued.

“One of the indicators that we track year over year is depth of poverty by family type … and they’re all about 30 to 40 per cent below that low-income measure. Bumping up to a $16 minimum wage is not going to close that gap. A parent would still have to work three, four extra months full-time with no deductions to close that gap,” she said.

While labour and anti-poverty advocates support minimum wage increases, business lobby groups say their members are still struggling to deal with the economic impact of the COVID-19 pandemic.

“If you are doing it during a really strong economic time, it’s certainly different than doing it when there are a lot of economic challenges,” said Ryan Mallough, Ontario regional director for the Canadian Federation of Independent Business.

The economic impact of the pandemic will still be around for a while, said Mallough, adding that small businesses have racked up an average of $175,000 in debt during COVID-19.

“Just because we’re able to meet inside again, and go to movies, and have 20,000 people at Scotiabank Arena or 50,000 at the Rogers Centre, it doesn’t mean the last two years didn’t happen,” Mallough said. “And for small business owners, that’s a lengthy period. They’re already facing other cost pressures. Adding another one is difficult.”

Wage increases at the bottom of the scale filter upwards to other employees, and that, argues Mallough, hurts smaller businesses the most.

“For the majority of our members, that’s the bigger issue: The upward pressure it puts all the way up the chain,” said Mallough. “The small retailer is not Walmart. Walmart realistically can absorb those kind of increases to their bottom line. The small retailer in Toronto the last few years likely doesn’t have that ability.”

The restaurant industry, in particular, has been hammered by repeated COVID-19 lockdowns, and is facing cost increases thanks to supply-chain issues, said James Rilett, Central Canada vice-president for Restaurants Canada. Higher wages will be tough for many restaurants to afford after the struggles of the last two years, Rilett said.

“In normal times, you’d have some flexibility financially, or you’d be able to raise prices a bit,” he said. “But prices are already rising, and people have taken on so much debt, they don’t have any flexibility.”

But Ladd argued that predictions of doom and gloom because of a hike in the minimum wage rarely come true.

“When the minimum wage went up from $11.60 an hour to $14, people said small businesses would collapse under the pressure — and they didn’t,” she noted.

There’s a simple reason for that, Ladd said: People who earn the minimum wage spend every penny they’ve got, and they almost always spend it locally.

“If people have more money in their pockets, they will spend it at that mom and pop shop. They’re not going to spend it in Switzerland on a ski holiday,” said Ladd.

“Most of the members we have can’t even afford a TTC ticket right now, because it’s over three bucks. They’re not travelling outside of their neighbourhoods.”

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