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Greater Niagara Chamber of Commerce

Niagara may be feeling effects of minimum wage hike: Chamber

Niagara may already be feeling the effects just one month since Ontario increased the minimum wage, says an organization representing businesses in the region.

The provincial government hiked the minimum wage to $14 an hour Jan. 1, with a further $1 increase to come next January.

The statistics are now out for the first full month since the increase, and officials with Greater Niagara Chamber of Commerce said the numbers are “sobering.”

In a news release, the chamber said analysts across the country, including the Canadian Centre for Economic Analysis and the province’s independent Financial Accountability Office, warned job losses would be a predictable result of the province’s legislation.

As many as 185,000 Ontario jobs could be at risk by 2020, the Canadian Centre for Economic Analysis found.

The chamber said economists were expecting the economy to add 10,000 jobs, but instead, 88,000 jobs were lost after the first full month since the bill’s implementation — the most in nine years.

The chamber, which has 1,600 members representing 50,000 employees, said 51,000 service sector jobs alone were lost in Ontario, all part-time.

Between December and January, the St. Catharines-Niagara census metropolitan area lost a net total of 700 jobs, said the chamber.

Youth were harder-hit, with 2,000 jobs held by 15- to 24-year-olds disappearing, as were women, who lost 900 jobs compared to a small gain for male workers.

While Niagara’s goods-producing sector added 500 net jobs, with construction (and, to a lesser extent, manufacturing) counter-balancing losses in agricultural employment, the local service sector lost 1,200 jobs.

Although Niagara’s part-time employment increased overall, with an extra 500 jobs being created, the region reversed the national trend, losing 1,200 full-time jobs.

Compared to January 2017, the region has lost a net total of 1,600 jobs, year over year, and 7,700 jobs among 15- to 24-year-olds — meaning for every four young Niagarans who held a job in January 2017, one is now unemployed.

The chamber, which is the third largest in Ontario, said losses have been felt most acutely in the service sector, which has shed 3,000 jobs since January 2017.

“These figures should draw attention to the fact that workplace legislation changes in Ontario have a real impact, not just on many Ontario employers, but on their workers as well,” said Mishka Balsom, the chamber’s president and chief executive officer.

“Our businesses are members of our community, and their health is tightly linked to the prosperity of our community. We ignore that linkage at our peril.”

The chamber said it cautioned that many businesses squeezed by minimum-wage increases would survive only by laying off workers.

Chamber officials said this could be what is taking place, with employers having started last year in anticipation of the crunch to come in January. Minimum-wage jobs are predominantly found in the service sector and held by young people, and these are where the jobs have been lost, stated the release.

Niagara continues to shift from full-time to part-time work.

This could be explained by shift cuts pushing some workers below the 30-hour-week threshold used by Statistics Canada to define full-time work.

It could also be that employers, under increasing wage pressure, increasingly find themselves unable to offer full-time positions.

Chamber officials said as the year continues, it will continue to analyze what sort of an effect labour law changes are having in Niagara.

Glen Walker, chairman of Niagara Poverty Reduction Network, said he questions whether there has been a “proper connection” between government programs to help small businesses as they go through this transition.

“How many are connecting and how many are utilizing the programs that the provincial government supposedly has in place?” he said.

Walker said it’s also important to think about what the philosophy is of businesses “at this point in time.”

“Are they really just saying we have to maintain this profit margin that we’ve got, or keep our margins where they are, as a result we’re going to send our employees out the door? For us, obviously social conscience is key — you’ve got employees, a group of people, you’re working with and supporting.

“Yes, you’re trying to make profit and make money, but at the same time what obligation do you have back to your employees who didn’t decide they wanted this increase, but at the same time are living in poverty.”

Niagara Poverty Reduction Network works to wipe out poverty through education, collaboration and advocacy to address poverty’s root causes.

Walker said there seems to be a lot of discussion around the impact on businesses, which “obviously is driving our economy,” but not enough about how an increase in the minimum wage could be helping workers.

“How many people on the other side of the coin have received an increase and are benefitting from this and are improving their life as a result of this? We don’t hear much about that. I think it’s important to think about that balance. There’s only a small percentage of people earning high incomes, but there’s a significant number of people who really are struggling and not doing well, and this is certainly going a ways to at least help them with that.”

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