Students and minimum wage

By: Takhliq Amir

On Jan. 1 of this year, Ontario’s general minimum wage, in accordance with Bill 148, Fair Workplaces, Better Jobs Act, saw what is considered a somewhat drastic rise from $11.60 an hour to $14 an hour.

As a student who has held various work positions over the past few years, I was nervous due to the predictions that such a minimum wage hike would shrink the economy or cost vulnerable populations, including youth like post-secondary students or recent graduates, our ability to find good jobs.   

When the bill went into effect at the start of the year, news of a Tim Hortons in Cobourg cutting its workers’ benefits and other branches asking their employees to pay for uniforms or turn in their tips began to emerge. Such stories, as well as concerns raised by small businesses even before the change occurred, seemed to only propagate the fear that now seemed to be coming true. Although McMaster made changes to its part-time wage grid to reflect the new minimum wage and continued its policy of paying part-time staff 15 cents higher at minimum, my first thought was to question whether McMaster would be hiring fewer students as a result moving forward.

Tied to the Ontario government’s current theme of fairness for all, the ideal vision for the new labour law is to stimulate economic activity by increasing consumer spending — after all, what will individuals do other than spend the extra money they earn? This, in turn, is expected to lead to job creation and offset some of the expected loss in employment, a logic that some are still finding hard to grasp.

It remains a question whether academic institutions moving forward will cut positions, especially independent researchers whose capacity to hire students depends on the funding they have received for their projects.

The tight timeline has led to understandable anger and agitation, even pushing some employers to either implement or consider drastic changes. Some have suggested replacing temporary workers with “higher paid, more productive” employees or, alternatively, introducing automation to reduce the need for human capital where possible. Others have expressed concern in their ability to keep on workers, stating that they don’t want to fire their employees but are unable to keep all of them at a higher minimum wage when their budgets are often limited and their profits modest.

I can see that these fears aren’t irrational. However, this issue remains one largely created by the way that it has been painted in the media even more so than any large-scale impact it has had in such a short time. For instance, variable projections were made about how many jobs would be lost due to this law.

The impact of the new minimum wage is supposed to be negligible at a macroeconomic level, with these numbers equalling the number of fewer jobs that might be created as opposed to the number of jobs lost. A slight technicality, but it does mean a difference.

While the bill seems to have its merits and faults, perhaps a valid argument is made by individuals who believe that it creates greater barriers for those who don’t. This includes the vulnerable populations this bill aims to help, including youth or new immigrants who may already be having a tough time finding work.

While McMaster hasn’t necessarily made any cuts to the number of positions open to students, it remains a question whether academic institutions moving forward will cut positions, especially independent researchers whose capacity to hire students depends on the funding they have received for their projects.

However, it’s too early to label this as a failure. Doesn’t it seem sensible to assume that those who do have work positions may just help grow the economy simply because $14 (and $15 soon) sounds a lot better than $11.60? The main voice of opposition has been the small businesses, but the individual perspectives have largely been silent, most of whom stand to benefit from an increased wage.

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