Sudbury workers cautious about celebrating minimum wage hike

Employers in Ontario can no longer pay their workers less than $14 an hour, after the first phase of the Liberals' two-step minimum wage reform kicked in on Jan. 1.

But many managers and longer-tenured workers remain unsure about how the changes will affect them.

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As the manager of a pizza shop in downtown Sudbury, Aaron Schultz says he was making a few dollars above the old minimum wage, but less than $14 per hour.

He's worried his wages will now be capped at the new minimum wage.

"My big concern is that when I ask for a raise, my work is going to be devalued," says Schultz.

"I've been in customer service and a manager for about 10 years now. But I'm afraid they'll say no [to a raise], I'll have to look elsewhere."

Schultz notes his own manager will be speaking to the company's head office on his behalf.

"I'm not asking for anything greedy, I don't want to be put up to $21 or $22 an hour. But I'd like to at least see $1.50 above [the new minimum wage]."

Schultz admits he doesn't believe he'll have much of a choice.

"I think I'm going to end up staying here regardless because of the way it is out there in the job market," he says.

"Even here, we've already cut hours by almost 50 per cent, and I've been told there may be possible layoffs because of the wage increase."

Keeping up with rising costs

Jennifer Brohart is also a middle-manager, who works at a retail store. She's concerned the government's plans won't allow her to keep up with rising costs.

She says she supports the wage hike, but is concerned the government's two-year plan won't give her the chance to keep up with the rising costs of an adjusting economy.

"The government has to have mechanisms in place to avoid large price increases, or spread them out evenly [over the two years]. That way, people like us near minimum wage will have the chance to play catch-up so we're not feeling like we're bottom dog," Brohart explains.

"A lot of our employees are students too so the increase is going to be a big help. I'm a single person struggling with a house. The last thing I want to do is sell my house to be able to afford to live."

She says she also believes managers and longer-tenured workers making above minimum wage deserve a bump relative to their less-experienced colleagues.

"I'd be satisfied with the extra 40 cents I make now [above minimum wage]...but I haven't heard anything about it yet," Brohart says.

'A good first step'

In Sudbury, a handful of small businesses fear they'll be forced to shut down because they'll need to absorb the increased costs over such a short period of time.

Other critics have warned there could be tens of thousands of job losses across the province caused by the wage hike.

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Such fears are largely unfounded says John Peters, an associate professor in labour studies at Laurentian University.

"In almost all cases in the US where you've seen increases in minimum wages, there's been no evidence to suggest unemployment has gone up or that businesses have actually been hurt," Peters says.

"Usually, it's the opposite and it's improved local economies."

Peters notes that in Ontario productivity has doubled and the education and skills of the workforce have improved, but most workers have seen little to no benefit.

"This wage stagnation has reached, over the last 15 years, to include university and college educated workers," explains Peters.

He adds that Ontario has the most low-wage earners and the highest income gap in the country.

"If the minimum wage is increased and it does have that wider direct and indirect impact, it's going to help about 40 per cent of workers, or 3.5 million people across the province."

Peters believes that governments should take further steps to ensure that minimum wage earners can keep up and eventually contribute to the adjusting economy.

"I think taxing high incomes, ending tax deductions for the wealthy and cracking down on tax havens, that would be probably the best way to make our economy productive again," he says. 

"That would make sure everyone's going to see the gains from any kind of economic boost over the next few years."