Majority of HRPA members say minimum wage
increase would not affect their organizations
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As a follow-up to the Consultation Paper on Ontario’s Minimum
Wage that was released by the Ministry of Labour in July
2013, the Human Resources Professionals Association (HRPA)
conducted a survey of its membership on Ontario’s current approach
to setting the minimum wage, and determining changes
to it in the future. The survey drew a large response from HRPA
members and reflected the diversity of where they work – 18 per
cent in small organizations, 37 per cent in SMEs and 45 per cent
in large businesses.
While the majority of respondents (64 per cent) answered that
an increase in Ontario’s minimum wage would not have a negative
impact on their organization, HRPA heard from the 20 per
cent who said that it would – making the case that any increase in
minimum wage is automatically reflected in the price of consumer
goods, which are then purchased by minimum wage earners.
Many also argued that any increase in the minimum wage would
have serious consequences on businesses’ ability to operate in Ontario,
resulting in increased unemployment and more pressure on
the EI system. The commentary captured the complexity of the
issue – respondents differed on whether or not minimum wage
should be a “living wage”, several pointing out that minimum wage
was never meant as a guarantee of being able to earn a living, and
is just meant as a “floor” for the salaries of unskilled workers. For
others, the question is how best the government can ensure an adequate
living wage for all workers in Ontario, while protecting the
ability of employers to do business here, in the face of competition
from around the world. Suggestions for breaking the cycle focused
on providing skills training for unskilled workers, to support them
in earning more than the minimum wage, stimulating consumer
spending and addressing the cost of housing, childcare, food and
other basic living expenses, including financial incentives for minimum
wage earners who are supporting children.
91 per cent of respondents believe that there should be a formal
mechanism in place to review the province’s minimum wage,
with 61 per cent advocating for a mandated review process which
requires the government to conduct a periodic review of the minimum
wage rate. Most replied that such a review should happen every
two years, while 20 per cent of respondents expressed concern
that a regular review process would result in regular increases to
the minimum wage, a cost which would ultimately be prohibitive
for business, with the added effect of goods and services becoming
too expensive to afford.
According to respondents, the most important factor when
reviewing the minimum wage rate should be the cost of living.
Other factors, including unemployment and taxes, as well as the
impact of minimum wage on businesses, registered very low. ■
14 ❚ JANUARY 2014 ❚ HR PROFESSIONAL