Sunday October 16, 2016

Does raising the minimum wage hurt low income workers more than it helps?

On October 1, 2016 Alberta, Ontario, Saskatchewan, and P.E.I. raised the rates of the minimum hourly wage, which has a few businesses discussing scaling back hours and raising prices.

On October 1, 2016 Alberta, Ontario, Saskatchewan, and P.E.I. raised the rates of the minimum hourly wage, which has a few businesses discussing scaling back hours and raising prices. (Getty Images)

Listen to Full Episode 1:52:59

Four provinces raised their legislated minimum wage this month ...and some businesses are cutting employees as a result. Does setting a basic living standard hurt low income workers?

Duncan McCue

Host of Cross Country Checkup, Duncan McCue.

They are the fast food workers, asking if you want fries with your order; cashiers, scanning your items at your favourite big box retailer; they are serving coffee; delivering pizzas; cleaning offices. Over a million people across Canada toil for minimum wage. Often young, female, or new immigrants, working hard and some say not getting ahead.

This month, four provinces raised their minimum wage—modest increases from just over a dime, to a dollar. The provinces are led by Alberta's NDP government, which will boost its minimum wage to $15 an hour by 2018. The rationale is that higher minimum wages help the working poor, by putting more money in people's pockets and they spend that extra cash in the community.

But some in the business community warn these minimum wage hikes come at a steep price. That it will force businesses to trim workers' hours, lay off employees, raise costs to consumers, and that ends up hurting the poor and the economy.

Our question: Can raising the minimum wage hurt low income workers?

Guests

Armine Yalnizyan, Senior economist, Centre for Policy Alternatives
Twitter: @ArmineYalnizyan

Stephen Gordon, Professor of Economics at Laval University in Quebec City and blogger for Macleans magazine.
Twitter: @stephenSGordon

David Green, Professor in the Vancouver School of Economics at UBC and an International Fellow at the Institute for Fiscal Studies in London