Local Prof Calls For Recovery After Minimum Wage Shock

After a report from the Bank of Canada predicting 60,000 fewer jobs by 2019 because of minimum wage hikes across the country, a local economics buff is warning to beware of the headline.

Alfie Morgan is a professor emeritus with the Odette School of Business at the University of Windsor.

He stresses the figure reported by national news agencies across the country is not the official position of the Bank of Canada and is simply a research paper.

The minimum wage in Ontario is up to $14/hr from $11.60/hr and is set to jump again to $15/hr an hour in 2019.

Alberta is expected to roll out a $15/hr an hour minimum wage later this year as well.

Morgan says legislated wage increases will be felt by some, but expects recovery to follow.

"That shock will be just an initial shock," says Morgan. "Somehow people will not be able to cope with the increase, they might decide to let some people go, cut down working hours but, very soon they will recover and restore the employment again the way it was."

In Ontario, Morgan is less concerned about the minimum wage jump and more nervous about the other labour measures included in The Fair Workplaces, Better Jobs Act.

"There were many strings attached coming with this law, that is the part that really worries me and if we're going to be experiencing job losses, it's not going to be because of the wage level but, it's going to be because of the other attachments."

Morgan thinks time will prove him right in predicting a bounce back in the job market after the initial shock.

"I see a lot of drama in there which is not substantiated by the facts on the ground."

Morgan feels what's getting lost in the conversation is that more people will have more money in their pockets.

"Don't forget also, with the increase in the minimum wage, people will be spending more money."

The central bank estimates about 8% of all employees work for minimum wage.