TORONTO—Ontario’s move in 2018 to raise the minimum wage reduced the racialized wage gap, particularly for women, amid rising employment, according to a new study from the Canadian Centre for Policy Alternatives (CCPA).
When the $14-per-hour minimum wage was implemented in 2018, business lobbyists made dire predictions that it would lead to massive job losses. That simply didn’t happen. In fact, far from being a “job-killer,” wages grew in Ontario while total employment increased by 1.7 per cent in 2018 and by 2.8 per cent in 2019, according to the new report.
“The results are clear: raising the floor benefited all workers and reduced the racialized wage gap—especially for Black women—without lowering employment levels,” says study co-author Grace-Edward Galabuzi, Associate Professor of Politics and Public Administration at X University in Toronto.
The study, funded by the Canadian Race Relations Foundation (CRRF), found that across the Ontario economy the average hourly wage rate increased by 3.4 per cent between 2017 and 2018. All industries with lower-than-average wages, except for agriculture and manufacturing, had increases in employment.
Among the study’s findings:
- As a result of the gendered nature of low-wage work, wage gains were larger for women than they were for men across all racialized groups. On an hourly basis, the estimated increases for Black women (4.9%) and racialized women (4.7%) outpaced those for non-racialized men (3.4%).
- The faster estimated pace of increase in earnings for racialized and Black women reduced the racial and gendered earnings gap in Ontario.
- Seventy per cent of minimum-wage workers benefiting from a raise were adults, contradicting the notion that these workers are mostly teenagers at the start of their working lives. There was a sharp increase in the share of minimum-wage workers 25 years of age or older between 2017 and 2018, from 41 per cent to 50 per cent. This illustrates the large number of these adult workers just above the minimum wage who benefited from this increase.
“No worker should struggle to put food on the table, yet that is too often the case for many workers employed in minimum-wage jobs,” said Mohammed Hashim, executive director at CRRF. “This study shows how raising the minimum wage betters the lives of all workers, especially those who are racialized and who are women. Addressing racism in Canada includes addressing inequality at work.”
”This is another example of the important role government policy plays in leveling the playing field and improving work conditions, particularly for low-income workers, racialized workers and immigrant workers,” adds report co-author and CCPA Ontario Senior Economist Sheila Block.
One Step Forward: Assessing the labour market impacts of Ontario’s 2018 minimum wage increase is available for download on the policyalternatives.ca website.
For more information and interviews please contact: Jolson Lim, CCPA Communications Specialist, at [email protected] or 613-413-0945.
The CCPA is an independent, non-profit charitable research institute founded in 1980.