The Bank of Canada estimates there will be around 60,000 fewer jobs come 2019 due to the countrywide increase in minimum wage, but that labour income will be higher as a result.
Ontario raised its minimum wage to $14 per hour on Jan. 1 from $11.60, with plans to increase it to $15 in 2019. Alberta is expected to raise its minimum wage to $15 later this year.
The number of jobs lost was based on a 0.3 percent decline in working hours, while aggregate real wages were estimated to increase 0.7 percent.
BoC estimated that about eight percent of all employees work at the minimum wage level, and if a threshold of 5 percent above minimum wage is used, that number will increase to 11 percent.
Economists, however, say that there is nothing to worry about, and that wage increases will only benefit Canada’s economy.
For one, the report didn’t say that 60,000 people will be layed off, so it could really just mean 60,000 fewer jobs will be created.
It’s really too early to thoroughly figure out the effect this is going to have on the country, so we’ll just have to see how this plays out.