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Greater Niagara Chamber of Commerce

Niagara May Be Feeling Effects of Minimum Wage Legislation

On January 1st, the Government of Ontario introduced sweeping changes to the province’s labour laws with the Fair Workplaces, Better Jobs Act, most notably including a hike in minimum wage to $14/hr, with a further $1/hr increase to come next January.

Analysts across the country, including the Canadian Centre for Economic Analysis (CANCEA) and the province’s independent Financial Accountability Office, warned that job losses would be a predictable result of this legislation. As many as 185,000 Ontario jobs could be at risk by 2020, CANCEA found.

The statistics are now out for the first full month of the bill’s implementation, and the numbers are sobering. Economists were expecting the economy to add 10,000 jobs, but instead, 88,000 jobs were lost – the most in nine years.

49,000 full-time jobs were gained in the country, but 137,000 part-time jobs were lost. Most – 71,900 – were in the service sector, and 51,000 were lost in Ontario, all part-time.

Between December 2017 and January 2018, the St. Catharines-Niagara census metropolitan area (CMA) lost a net total of 700 jobs. Youth were harder-hit, with 2,000 jobs held by 15-24-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) counterbalancing losses in agricultural employment, the local service sector lost 1,200.

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 of 2017, the region has lost a net total of 1,600 jobs, year over year, and a staggering 7,700 jobs among 15-24-year-olds – meaning for every four young Niagarans who held a job in January 2017, one is now unemployed. Again, losses have been felt most acutely in the service sector, which has shed 3,000 jobs since January 2017.

The GNCC cautioned that many businesses squeezed by minimum wage increases would survive only by laying off workers, and this could well be what we are seeing, 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 exactly where the jobs have been lost.

Niagara continuous 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.

As the year continues, Niagara will see what sort of an effect labour law changes are having. Economists believed that the effect would be a slowing of job creation, not actual job losses, and yet across Ontario, 51,000 jobs have already been lost. This may be an aberration, or it may mean that the effects are even worse than the most pessimistic predictions of 2017.


Quotes:

“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. 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.”

— Mishka Balsom, President & CEO, Greater Niagara Chamber of Commerce


 

The Greater Niagara Chamber of Commerce is the largest business organization in Niagara and the third-largest Chamber of Commerce in Ontario, with 1,600 members representing 50,000 employees. More information on the GNCC is available at gncc.ca.

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Contact:
Mishka Balsom, President & CEO, Greater Niagara Chamber of Commerce
Mishka@gncc.ca or 905-684-2361