The minimum wage for Ontario workers rose to $8.75 an hour Monday and will continue to go up over the next two years as promised even though the province is facing a major economic downturn, the government said.
  
Monday's 75-cent increase from $8 an hour has been assailed by labour groups, who say it's not enough to lift workers out of poverty, and by businesses, who say higher wages will cripple employers struggling through an already difficult period.
  
But Labour Minister Brad Duguid says there are no plans to halt the annual minimum-wage increases introduced in last year's provincial budget despite the dark clouds on Ontario's economic horizon.
  
"We'll stick to our five-point plan, which invests in our people, invests in infrastructure, invests in innovation, invests in strategic partnerships and helps lower taxes. That's what's going to lead us through this difficult time," Duguid said in an interview.
  
"Lowering the minimum wage is not going to be advantageous."
  
The wage increase means Ontario will have the highest minimum wage in Canada, Duguid said. Planned hikes will raise it even further — to $9.50 per hour in 2009 and $10.25 in 2010.
  
"We've done it in a way that is aggressive but gradual to allow businesses to adjust, so that we don't hurt the very people that we're trying to help," Duguid said.
  
But that's exactly what the province is doing, according to Satinder Chera, the Ontario director of the Canadian Federation of Independent Business.
 
Paying higher wages forces employers to cut benefits and curtail hiring, which means there will be fewer jobs to go around, he said.
  
"No one begrudges giving those that are struggling to make ends meet a way forward," Chera said. "But we've always said to the government that there are other options."

Invest in training instead, businesses say

One option, he said, includes training workers for better jobs, including the thousands of jobs that go unfilled for months because employers can't find suitable candidates.
  
"The current rules that are in place on skills training actually make it more difficult for businesses to hire those individuals and to train them," he said. "We're actually handcuffing ourselves."
  
Progressive Conservative Bob Bailey said the Opposition wants to "take the politics" out of the minimum-wage debate by creating a commission to weigh factors such as economic conditions.
  
"Anybody that's in business and having a problem already — this could be just enough to [cause] layoffs," said the MPP for Sarnia-Lambton. "We don't need that."
  
Labour groups say the minimum wage is still too low and forces workers — particularly women, immigrants and minority groups — to juggle two or three jobs to make ends meet.
  
About one quarter of Ontario's workforce is paid less than $10 an hour, said Sonia Singh of the Workers' Action Centre. According to her calculations, a full-time employee working for minimum wages will earn about $18,200 a year, which is $4,000 below the low-income threshold defined by Statistics Canada.
  
"Nobody should be working a 40-hour week yet still be living in poverty," Singh said. 
  
The group is staging a demonstration Monday to urge the government to raise the minimum wage immediately to $10.25 an hour. NDP member Cheri DiNovo, who calls the $8.75 per hour wage a "shameful joke," has promised to introduce a private member's bill Tuesday to support the hike.
  
Businesses that complain they won't be able to hire more people if the minimum wage goes up are just making excuses, Singh added.
  
"There have been lots of studies done in other jurisdictions where the minimum wage has gone up, and even gone up quickly, that show that there is no detrimental effect on jobs or on the economy," she said.