The Better Way Alliance is a group of Canadian Business Owners that support minimum wage increases.

The Ontario election is here & our team at the Better Way Alliance is here to clear up 3 minimum wage myths.

Minimum Wage increases are coming to Ontario.  While some groups will tell you this will have devastating effects – increases to minimum wage often provide people with disposable income they didn’t have before. Read our 3 Minimum Wage Myths below and why increases are generally a good idea.

In the 2022 Ontario Election, the 4 main Political Parties are all making promises about the general minimum wage:

  • Ontario PCs: Follow legislated cost of living adjustment from $15.00 to $15.50 per hour in autumn 2022
  • Ontario Liberals: increase from $15.00 to $16.00 per hour by 2023, and work towards establishing a regional living wage
  • Ontario New Democratic Party (NDP): increase from $15.00 to $16.00 per hour in autumn 2022, followed by a $1.00 per hour increase each year until a $20.00 per hour minimum wage is reached by 2026
  • Ontario Green Party: increase from $15.00 to $16.00 in autumn 2022, followed by a $1.00/hr increase per year for undisclosed number of years + work towards establishing a regional living wage

MINIMUM WAGE MYTH #1: A Higher Minimum Wage Hurts Businesses

The first myth is that raising the minimum wage hurts business.

The truth about minimum wages can be unclear and makes the issue a hot potato. Even at the Leaders’ debates it isn’t easy to clearly understand whether higher wages are good for the economy or not. The truth is, a higher minimum wage is a good thing for local businesses and the economy.  Many businesses have struggled financially because of the pandemic and the prospect of raising wages can be stressful. However, the truth is that most small businesses already paid higher than minimum wages

When a business has to hire new employees every 2-3 months, it ends up costing more than if they had paid $2-3/hr more to retain an employee for longer. Retaining employees for longer saves businesses money because they don’t have to spend more on training new staff as often.

MINIMUM WAGE MYTH #2: Wage costs are the #1 concern for business owners

The second myth is that wages are the number one cost concern for businesses.

Labour costs are overshadowed by worries about rent increases according to a 2022 survey report published by the Better Way Alliance. Survey respondents said that unpredictable increases in commercial rent was their number one cost concern.

In Ontario, commercial rent prices can be increased by any amount at the end of a lease. Insurance costs have increased since the pandemic, adding to this cost stressor. Already cash-crunched businesses can’t afford these rent hikes and either spend money moving or simply shut down.

This problem has gotten worse during the pandemic. So far, only the Ontario New Democratic Party (NDPs) have promised to standardize commercial rent. No other political party has yet put the issue on their election platform – but they should to help protect Ontario businesses.

MINIMUM WAGE MYTH #3: Higher Minimum Wages = Closed Businesses

The third myth is that higher minimum wages cause businesses to close down because they can’t afford wage increases.

This is untrue. In 2018, the minimum wage in Ontario increased from $11.60 per hour to $14.00 per hour. This actually led to a large increase in spending at local businesses. The Toronto Star reported that the wage increase was followed by a boom in employment and an 18-year low in the jobless rate in the province.

Workers who got a pay raise spent their newfound money at local businesses – immediately putting money back into the economy and creating more jobs because of it.

Small business owners need more support for their most important concerns

Many small businesses in the province support a higher minimum wage because it’s just good for the economy. Instead, these businesses want more attention paid to bigger cost worries like commercial rent increases.

Small businesses employ the majority of workers in Ontario and comprise the majority of businesses in the province. They make Ontario communities diverse, livable and vibrant. It is important to ensure that these businesses are supported by government policies that enable them to recover from the pandemic and flourish.