....no new taxes and 239 other things that were the bulwork of his last election campaign. But let's forget those promises he didn't keep and let's make up a new promise list starting with.......
Minimum wage to rise
That will be the minimum wage in the budget blueprint
March 21, 2007
Robert Benzie
Queen's Park Bureau Chief
The Ontario government will bump the minimum wage to $10.25 an hour by 2010 (Promise no. 1)in the provincial budget tomorrow, the Toronto Star has learned.
It comes after weeks of pressure on the government from poverty activists and the New Democrats for an immediate hike to $10 an hour from the present $8 an hour.
Instead, the increase will be phased in over three years, sources say. Next year it will jump to $8.75; in 2009 it will go to $9.25 an hour; and in 2010, to $10.25 an hour.
The cautious approach will be backed by a study to be released by Finance Minister Greg Sorbara tomorrow that warns of heavy job losses if the government were to immediately increase the minimum wage to $10 an hour.
When asked about an immediate jump yesterday in the Legislature, Premier Dalton McGuinty said, "just as it would be irresponsible to hold the minimum wage at $8 an hour indefinitely, it would also be just as irresponsible to raise it to $10 an hour overnight." The minimum wage was $6.85 an hour in 2003 when the Liberals formed the government. They have gradually increased it to $8.
The study to be released by Sorbara tomorrow will warn that 90,000 to 180,000 jobs could be lost if the minimum wage is increased by 25 per cent in one fell swoop.
Sorbara – who will underscore the budget's focus on poverty with a press conference today at an agency that helps single mothers on the brink of homelessness – commissioned University of Toronto professor Morley Gunderson to study the impact of a $2 hike.
Gunderson, paid $24,000 for a sobering 50-page report that took him six weeks to complete, found such a dramatic rise in the wage could cost even more jobs than the 66,000 the finance ministry had estimated.
"A 10 per cent increase in the minimum wage would give rise to about a 3 per cent to 6 per cent reduction in employment," the professor said in an interview.
"So a 25 per cent increase, then just multiply those adverse employment effects by two and a half. In fact, it could be worse in the sense that the very limited evidence suggests that the response to a big increase is actually quite a bit greater than the response to a series of smaller increases of the same magnitude," he said.
In other words, an immediate $2 increase could translate into a 7.5 per cent to 15 per cent decrease in jobs. With 1.2 million Ontarians earning $10 an hour or less, that could spell the loss of between 90,000 and 180,000 jobs.
But Gunderson emphasized that doesn't mean existing jobs would necessarily vanish, because the economy is growing.
"It's not that those jobs are lost, it's just that those jobs are not there now that would have been there," said the professor, one of Canada's leading labour market economists.
"It will hurt the growth of employment. In a growing economy that tends to be absorbed, but it does mean slower job growth for young people," he said, noting teenagers and people up to the age of 24 would be hurt most.
"That's the group that will be affected. Very few people beyond that are at the minimum wage. It really is a teenage and youth phenomenon."
Sorbara, for his part, declined to discuss his plans.
"I'm reluctant to give specific figures. I'll have more to say about this on Thursday," the finance minister told reporters.
Outside the Legislature yesterday, a small gathering of demonstrators rallied for an immediate $10 an hour wage.
At the rally, NDP MPP Cheri DiNovo (Parkdale-High Park), who is pushing private members' legislation for a $10-an-hour minimum wage, said poor people need help sooner rather than later.
"If they phase it in, really they're just phasing in another era of poverty for ... Ontario's lowest-paid workers. We need it now. This is catch-up, this is not really a raise," said DiNovo.
"Phasing it in over three years is not good enough," she said, noting Liberal and Progressive Conservative MPPs hurriedly rammed through 25 per cent pay hikes for themselves just before Christmas.
"We saw them giving themselves a raise in eight days, so they can certainly do as well as that for the poorest members of our working public," she said.
DiNovo added it was "absolutely nonsense" to suggest a 25 per cent rise in the minimum wage would have catastrophic consequences for the job market.
"This is just a scare tactic, really, to talk about lost jobs. No, that won't happen."
The minimum wage issue has become a difficult political problem for the Liberals.
Last month, the governing party lost a by-election in York South-Weston, once one of the safest Liberal seats in Ontario, when New Democrat Paul Ferreira toppled a McGuinty-anointed candidate, Laura Albanese.
With a provincial election on Oct. 10, the Liberals are concerned about their left flank, which is why tomorrow's budget is designed to steal some of NDP Leader Howard Hampton's thunder.
The government is also expected to address the controversial clawback of the National Child Tax Benefit among other initiatives aimed at alleviating poverty.
"We intend to find better ways to help children in particular growing up in poverty in the province of Ontario," said McGuinty.
"We will be moving towards a higher minimum wage, but we will be doing it the way we've already done it: in a thoughtful, balanced and responsible way."
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