Ontario unemployment fell to lowest point in 18 years after minimum wage hike

“In spite of some predictions to the contrary, Ontario’s sharp minimum-wage increase hasn’t killed its labor market,” reported Bloomberg this month. In fact, quite the opposite is true: the minimum wage hike in this case has corresponded with a booming economy.

“Business owners and economists fretted the 21 percent wage hike, which took effect Jan. 1, would cause a slowdown, but the latest employment report shows the province’s jobless rate fell to 5.4 percent in July, the lowest since 2000, and lower than every other province except British Columbia.”

While this might be surprising news to some, it confirms prior studies of minimum wage raises in the context of a Canadian economy. The report, “Dispelling Minimum Wage Mythology” studied the relationship between minimum wages and employment in all ten Canadian provinces between 1983 and 2012. It found no consistent evidence that minimum wage levels affect employment in either direction.

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