A study by two Unifor economists found there is is no consistent connection between higher minimum wages and employment levels in Canada.
The study, done for the Canadian Centre for Policy Alternatives (CCPA), was featured in major newspapers and on TV broadcasts across the country after its October 21 release.
“The quality of work Unifor does is being recognized outside the labour movement. That is how we are going to change the debate in this country,” said Unifor National President Jerry Dias.
The report, by Unifor economists Jordan Brennan and Jim Stanford, concludes that employment levels are overwhelmingly determined by larger macroeconomic factors than the minimum wage rate.
In fact, it found, higher minimum wages could just as easily result in more jobs, not less, by stimulating buying power.
Canadian policy makers should feel confident to move ahead with boosting the minimum wage, hopefully toward a living wage level, in a gradual and ongoing manner, without fearing that this will negatively shock employment levels, the authors suggest.
“Our results confirm that stimulating more purchasing power in the economy is the most important way to support job creation,” Stanford said as the report was released.
“The stagnation of overall wage levels has contributed to the weak demand conditions holding back Canada’s economy, and increasing the minimum wage would in fact help to address that weakness.”
The authors conclude that stronger minimum wages can be an important and effective tool in boosting earnings for low-waged workers, promoting greater equality and reducing poverty.
“The minimum wage is not solely an anti-poverty measure; it has a broader effect in strengthening labour incomes,” said Brennan.
To read the report, go to: www.policyalternatives.ca.