Don't opt out: click here to learn more about our work.

In defence of Ford’s minimum wage freeze

Why students should support the recently passed Bill 47

In defence of Ford’s minimum wage freeze

On November 21, Bill 47 was enshrined in provincial law. The much-maligned bill eliminates a bevy of provisions passed under the preceding government’s Bill 148, the Fair Workplaces, Better Jobs Act. The crux of the controversy surrounding the bill is that it freezes the minimum wage at a substantial $14 an hour, instead of the previously planned $15 an hour.

Many progressives, including students, have voiced their concern over the bill. But given the state of the economy following Kathleen Wynne’s tutelage, this freeze is Doug Ford’s best option and the right path forward for Ontario.

Legislation cannot overwrite the market

As pure as the intentions may be in advocating for higher wages vis-à-vis government mandates, it is not possible to legislate away poverty. Economic intrusions like artificial wage hikes always come prepackaged with unintended consequences.

At the end of the day, one individual’s wage is another person’s cost. Employment is the voluntary contract between those two individuals. The agreed upon wage is ordinarily set by basic market forces: supply and demand. Efforts by government to intervene in this contract cannot benefit the employee without affecting the employer.

As their costs of doing business increase, employers react. Industries such as food and entertainment lay off staff, cut their hours, or hike prices. As reported in the Financial Post, Ontario restaurants hiked prices in response to Wynne’s wage hike. Accordingly, in January, the province saw “food inflation [rise] to its highest annualized increase in nearly two years.”  

As also noted by BMO Capital Markets’ senior economist, Robert Kavcic, the restaurant price hikes were a direct result of the Liberal government’s policy. In the same period that saw the province’s minimum wage jump 21 per cent, Ontario’s restaurant prices grew at a faster rate than any other province in the country.

Restaurants weren’t the only industry to feel the economic ripples of Wynne’s progressive proclivities. The Canadian grocery conglomerate Metro estimated its costs incurred from the wage hike to exceed $40 million. As a result, the firm said that it plans on cutting staff hours, in addition to reducing the number of 24 hour stores in the GTA.

The service sector also felt the pinch of rising costs. In Collingwood, Little People’s Daycare closed its doors permanently, citing the steep and swift spike in minimum wage.

The hike hurts low-wage workers including students

A coterie of minimum-wage proponents argues that their preferred policy benefits university and college students by helping them pay off tuition loans. This too is a folly proposition. If the presumption is that you can simply give people more money with innocuous wage hikes, it could be argued that the minimum wage ought to just be $50.

An oft-cited claim is that $15 reflects what is considered to be a ‘living wage.’ However, this argument requires bifurcating economic policy from its indirect outcomes. As previously described, raising Ontario’s minimum wage to whatever politicians at Queen’s Park determined to be the ‘living wage’ increases the cost of living, arguably negating any positive results the wage hike bestowed.

The latest Ontario labour market report indicates that nine months following the wage hike, the youth unemployment rate in Ontario increased to a whopping 12.2 per cent. That’s a 15 per cent increase from a year ago when youth unemployment was already at 10.6 per cent.

The unemployment rate increased for the very same demographic minimum-wage proponents preen about supporting. Moreover, the minimum wage hike has also increased these now out-of-work university students’ cost of living, making cafés, restaurants, and groceries more costly.

In addition to affecting students and younger members of the workforce, the hike also priced people with certain disabilities out of jobs entirely. The previous Liberal government eliminated an exemption for sheltered workshops a place where people with mental or physical disabilities could find work.

Setting the minimum wage at $15 makes accepting a job that pays $14 illegal. Individuals who can’t compete for the higher wage effectively have their minimum wage reduced to zero. This was what happened at the sheltered workspaces, where people with disabilities were priced out of the job market.

There’s a reason electricians, plumbers, and other professionals don’t earn minimum wage. It’s called minimum wage because earning it requires minimum skill. I earned $15 an hour in my first job, and even that required laborious lifeguarding certifications.

If you want to help unskilled workers earning minimum wage increase their wages, the solution isn’t to blithely hijack the economy and inflate their wages. It’s to help them find better jobs. Unskilled labour was never meant to be the mainstay of the economy.

A far more effective solution is to empower individuals by helping them acquire skills that make them competitive for higher paying jobs. Furthermore, it is necessary to foster an environment where people can rise in the workforce. The onus is on government legislators to tackle tax and regulation burdens shackling businesses from potential growth. Ford’s Bill 47, in conjunction with his proposed tax cuts, puts Ontario on the path to achieving just that.

Harry Khachatrian is a fourth-year Electrical & Computer Engineering student in the Faculty of Applied Science & Engineering.

Ontario legislature passes controversial labour reform bill, repealing workers’ rights

Voting was delayed due to protests from Fight for $15 and Fairness

Ontario legislature passes controversial labour reform bill, repealing workers’ rights

The Ontario Progressive Conservative (PC) government passed Bill 47 — also known as the Making Ontario Open for Business Act — on November 21, repealing workers’ rights changes brought in by the previous Liberal government.

As a result of this new bill, minimum wage is now capped at $14 until 2020 and will no longer increase to $15 an hour on January 1. Workers will also no longer have two paid sick days and employers are allowed to require sick notes from their employees’ doctors.

The new bill also states that scheduling provisions, which were to come into effect by the new year, have been repealed. This includes the right to request scheduling changes if an employee has been employed for at least three months, a minimum of three hours’ pay for on-call workers, and the right to refuse requests to work if the employee was not notified at least 96 hours in advance.

The bill was expected to go through royal assent following its third reading Tuesday afternoon. However, legislators motioned to adjourn the vote due to protests from Fight for $15 and Fairness, which is a labour lobby group that has a chapter at U of T among its membership.

Protesters were escorted out of the Queen’s Park gallery, shouting chants directed at Premier Doug Ford and the PC Party, primarily airing grievances about freezing minimum wage and taking away workers’ rights that would have been made available under Bill 148.

Naomi Litwack, a fourth-year architecture student at U of T, was in the galleries protesting the changes the moment security escorted members of the public out.

“I started chanting and then the guards started to try to quiet us down… Eventually, they started being a little bit more forceful in that they were… really grabbing people’s attention. Eventually, one guard got a whole row out. The guard for my section… said, ‘You can leave or you can be arrested.’ So we decided it was time to leave.”

Members of the opposition showed disappointment following the bill’s move to royal assent.

“We just saw workers’ rights be torn out from under them. We just saw the lowest-income workers lose $2,000 in increased pay because of the decisions that the government made today in passing legislation,” said New Democratic Party Leader Andrea Horwath following the vote.

“Our government should make it easier for businesses to employ people,” said Labour Minister Laurie Scott, in support of the bill. “We need to keep regulation and payroll taxes reasonable and manageable. We need common sense to inform good policy. Our PC government understands that regulatory burdens make it harder to do business and harder to employ workers.”

The PC government has faced major criticism regarding the bill since its introduction last month. Ford reportedly received death threats and Scott’s constituency office was vandalized.

“Passing Bill 47 shows that this government is not considering the real-world effects of decent work laws, which have helped the Ontario economy,” stated Ontario Federation of Labour President Chris Buckley in a press release. “It also ignores the voices of the people who will be most affected by these laws — women workers, racialized workers, Indigenous workers and workers with a disability.”

“That [protest] just shows you the number of people that are extremely disappointed and shows you the large gathering at Queen’s Park yesterday to voice their displeasure with the government,” said Buckley in an interview with The Varsity.

Simran Dhunna, President of Fight for $15 and Fairness UofT, wrote that the group was disappointed with the bill’s passage.

“We were able to delay the vote on Bill 47 by a day because the Ford government can’t bear to sit there and slash our labour rights as we, the people, watch,” wrote Dhunna.

“By passing Bill 47 this week, they made it clear — once again — how much disdain they have for workers in the province. We will remember this moment, and we will continue to fight for better labour protections.”

The Varsity has reached out to CUPE3902 for comment.

Provincial government to repeal Bill 148, targeting minimum wage, workplace legislation

U of T under fire for membership in anti-Bill 148 lobby group

Provincial government to repeal Bill 148, targeting minimum wage, workplace legislation

Premier Doug Ford’s government introduced legislation on October 23 to repeal parts of Bill 148 — the law that raised Ontario’s minimum wage from $11.25 to $14 an hour and strengthened workplace laws related to paid sick leave, equal pay for equal work, and other workers’ rights.

The University of Toronto has come under fire from local labour unions for its membership in the Ontario Chamber of Commerce (OCC), an independent, non-partisan business lobby group that has been a vocal supporter of repealing the bill. As a corporate member, U of T does not have voting rights but it can still influence the policy agenda.

Bill 148, titled the “Fairer Workplaces, Better Jobs Act 2017,” was introduced by the previous Liberal government in November 2017. The bill was set to increase the minimum wage to $15 an hour in January 2019, but Ford’s government has capped minimum wage at the current $14 an hour.

The OCC has taken a strong stance against the bill. The group cites claims of unintended price inflation on goods and services, as well as cutbacks on staffing and benefits by small businesses, among its grievances.

“In the months following its introduction, the Fair Jobs, Better Workplaces Act has had a visible impact on the Consumer Price Index, resulting in price increases for everyday consumer goods and services for every family in Ontario,” read an OCC press release from October 23.

Rocco Rossi, President and CEO of the OCC, said in a statement that “as Ontario’s business advocate, our position has always been clear: Bill 148 was too much, too fast. The compounding labour reforms and unintended consequences came at too high a cost to Ontario’s economy.”

Labour unions respond

The Ford government’s plans to repeal parts of Bill 148 have been met with strong pushback. On October 23, Ontario Labour Minister Laurie Scott’s office was broken into and vandalized, and the words “Attack Workers We Fight Back $15” were spraypainted on the walls outside her office.

Labour unions have been especially vocal in their opposition to the seemingly imminent repeal of Bill 148. Emergency rallies were held across Ontario over the past week in response to Ford’s plans.

One rally was held in downtown Toronto on October 24 in front of the offices of the Ministry of Labour. Local labour groups, including the Ontario Public Service Employees Union (OPSEU) and UFCW Local 175 and 633 were out in force. Groups held signs with messages of “$15 and fairness,” and cheers included “Hey Ford — Stop your hypocrisy! Fairness means democracy!”

The Varsity spoke to two U of T labour unions, CUPE 3261 and CUPE 3902, regarding the university’s position on the repeal of Bill 148. CUPE 3261 represents service workers, and CUPE 3902 represents sessional lecturers and teaching assistants.

“We are so very glad we were able to negotiate $15 an hour rate effective October 1, 2017 with the University of Toronto,” wrote Allan James, President of CUPE 3261, in an email. “We need a living wage, but $15 was a start. We don’t understand how anyone can afford to work in Toronto at this rate of pay.”

“It looks like [Ford] is listening to the Chamber of Commerce instead of trying to protect working people in Ontario,” James continued. “University of Toronto is a member of the Chamber of Commerce and should be advocating for equal pay for equal work.”

Members of CUPE 3902 also criticized the university’s membership in the OCC.

“As a [member] of the Chamber of Commerce, The University of Toronto is partially responsible for the lobbying of Big Business which led to this repeal,” read an email statement from Jess Taylor, Chair of CUPE 3902.

“As a leader in research, The University of Toronto should know gains for workers improve the economy, the city, and its culture. As an employer, The University of Toronto should protect its workers and should treat the people who are educating students with respect and dignity.”

“This is a grave disappointment,” Taylor said.

The university’s next steps

U of T increased its minimum wage to $15 in January to coincide with the anticipated raise mandated by Bill 148.

“Earlier this year, the University took a leadership role on this issue and increased the minimum rate of pay for most non-union casual employees to $15 an hour,” said Elizabeth Church, a U of T spokesperson. “The $15-an-hour wage is consistent with the rates of our unionized casual staff.”

The university has no plans to cap its minimum rate of pay.