Bank of Canada minimum wage job loss projection follows Conference Board prediction

first_imgThe Bank of Canada’s latest projection of how minimum wage increases in Alberta and Ontario will affect job losses comes as no surprise to the Conference Board of Canada’s director of provincial and territorial forecast service.“It’s in the same kind of range as what we expect,” Marie-Christine Bernard said after the bank’s latest report.The BOC’s “The Impacts of Minimum Wage Increases on the Canadian Economy” study stated while the net impact on labour income would be positive, there would be job losses.“The planned minimum wage increases would reduce national employment by about 60,000 jobs relative to otherwise by 2019,” the report said, while also looking at the effect on GDP.“Minimum wage increases would reduce the level of gross domestic product by roughly 0.1 per cent by early 2019 and boost CPI inflation by about 0.1 pp,” the report said.Bernard pointed out the board’s prediction was actually lower than the bank’s predicting a loss of around 50,000 jobs, with a vast majority coming in Ontario rather than Alberta.“We also have to consider where the minimum wage is compared to the median wage in the province,” she said. “In Ontario, it’s going to be substantially higher.“In Alberta not as much, because there’s less people earning minimum wage in Alberta.”Ontario raised its minimum wage to $14 per hour on Jan. 1 from $11.60 and plans to increase it to $15 in 2019, while Alberta is expected to raise its minimum wage to $15 later this year.Bernard said the losses would include both Canadians losing their current jobs, as well as planned positions that won’t go forward.“Maybe a business would’ve hired a worker and now they’re not,” she said.Both the bank and the board said the number of losses could be less than their projections, depending on how businesses react to the increases, for example by reducing the number of hours employees work.660 NEWS Business Editor Richard Southern said, however, he’s not convinced.“It’s not what we’ve seen in the past,” he said on Twitter. “Goldman Sachs analysis recently found that U.S states where the minimum wage went up had faster employment growth.”To read the full report, click here.last_img

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