Minimum Wage Debate: Should Provinces Replicate Ontario's Approach?

This essay examines the economic implications of increasing the minimum wage, specifically addressing whether other provincial governments should follow Ontario's example. Economic experts caution against abrupt minimum wage increases, citing potential negative impacts on economic pr...Read More

Running head: MINIMUM WAGE
Is increasing minimum Wage a Risk-Free Alternative for Helping out Low-income Earners in
Our Province
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Question 2: Should other provisional governments follow on Ontario’s Footsteps?

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Should other provisional governments follow on Ontario’s Footsteps?
Economic experts warn that abrupt increase in the minimum wage such as in the case
of Ontario is detrimental to economic progress. These experts warn that increasing the
minimum wage is not a guaranteed way of elevating poverty in the society as it can result in
an increase unemployment rates (McBride & Muirhead, 2016). Consequently, other
provincial governments should not follow in Ontario’s footsteps of increasing the minimum
wage for low-income earners due to its adverse effects on economic progress.
Increasing the minimum wage lowers the profits of firms by increasing their
operating costs. A study by Canadian Centre of Economic Analysis established that the
Ontario’s move risks the jobs of over 185,000 workers (Sagan, 2017). These same adverse
effects have been forecasted for British Colombia if they adopt Ontario’s approach. Precisely,
experts point out that such increments will not significantly aid in the eradication of poverty
in British Colombia. According to Lammam and MacIntyre (2018), 89% of British Colombia
residents are not from low-income households. Consequently, increasing the minimum wage
will increase the operation cost of businesses without necessarily impacting positively on the
lives of residents.
Moreover, McBride and Muirhead (2016) point out the implementation of the
minimum salary increment in British Colombia will lead to about 47% of low-income
households losing their jobs. As a result, increasing the minimum wage is likely to increase
the unemployment rates. Precisely, an increase in the minimum wage raises the operating
cost of a company as human resource compensation forms the bulk of a firm’s expenses. As
such, firms will reduce the number of employees in a move to control their profits. In this
respect, other provincial governments should not follow on Ontario’s footsteps in the

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minimum wage issue as it will impact on their economic progress adversely as illustrated by
the case of British Colombia.

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References
Lammam, C., & MacIntyre, H. (2018, February 15). On B.C.’s minimum wage, good
intentions are not enough. Retrieved from Fraser Institute:
https://www.fraserinstitute.org/article/on-bcs-minimum-wage-good-intentions-are-
not-enough
McBride, S., & Muirhead, J. (2016). Challenging the Low Wage Economy: Living and Other
Wages. Alternate Routes: A Journal of Critical Social Research, 27, 55-86.
Sagan, A. (2017, November 22). The pros and cons of a minimum wage hike. Retrieved from
MSN: https://www.msn.com/en-ca/news/canada/the-pros-and-cons-of-a-minimum-
wage-hike/ar-BBFvwKe