On Tuesday, Ontario’s provincial government, undeterred by the province’s title-claim to the world’s most indebted sub-sovereign borrower (one-third the population of California, and twice the debt!), raised its minimum wage to a whopping $15 per hour.
Left-leaning lemmings were instantly filled with vim and vigour, proclaiming the minimum wage hike a social justice victory.
The Canadian Broadcasting Corporation (CBC) led with, “How the Liberals went from cool to hot on $15 minimum wage.” Abandoning business decay as cause for concern, CBC ran another headline, “Ontario’s minimum wage raise a ‘small business killer,’ say critics, but for many it means feeling ‘human’.”
Reveling in hysteria and self-dramatization, liberals immediately decried the new law’s detractors as being cold-hearted and uncaring toward “working class families”. As the CBC’s own headline suggests, if you oppose the government-mandated minimum wage, you oppose people “feeling human.”
Here, in no particular order, are a list of reasons Canada’s Liberal government is making a terrible mistake by raising the minimum wage.
A Minimum Wage Hike Prices Low Skilled Workers Out of the Job Market
I got my first job in the summer of 2010. I was 17 years old, working as a lifeguard earning a generous (personally, I was very happy with it) $14 per hour.
At the time, the minimum wage was around $10 per hour.
I was making close to 50% over the minimum because prior to landing the job, I’d spent more summers than I can recall taking swimming lessons, as well as taking and completing first aid and lifeguarding courses.
What do you think would happen if the bare minimum you’re legally allowed to pay an employee jumps up to $15?
Naturally, lifeguards will also need a sizeable raise to maintain an incentive for people to expend the time and money on the required training. There’d be no reason to go through the trouble of becoming a lifeguard if you’re paid the same wage as a grocery store employee, who requires no prerequisite training, and has far less responsibilities.
This also means that companies employing lifeguards will prioritize hiring and keeping people with experience. This logic applies to jobs across the board. What you’ve effectively done is price low-skilled and inexperienced workers entirely out of the labor force. Their new “minimum wage” is now zero.
Youth unemployment in Ontario is higher than the national average. A recently published government jobs report showed that despite a slight January decline in national unemployment (5,700 less persons working than January of 2016), youth unemployment in Ontario was nearly 3 times harder hit (18,900 persons between 18 and 24 working in February of 2017 than in February of 2016). The Liberal government has a genius plan to address this. Make hiring unskilled, inexperienced young people more expensive!