Canada: Minimum wage myths

The idea that raising the minimum wage will drive up the cost of labour, force businesses to close and cost people their jobs is largely a myth, according to the work of economist Jim Stanford. The Unifor economist co-authored a report for the Canadian Centre for Policy Alternatives that looked at more than three decades of data from 10 provinces, using seven measures of employment and unemployment, and concluded the theory just doesn't hold up.

"In all of those studies, in 90 per cent of the time, we found no connection at all between minimum wages and labour market outcomes, and the remaining 10 per cent of the times, we did find a couple of cases where it was negatively associated, and we did find a couple of cases where it positively associated," Stanford said. "The overwhelming finding is there's no connection at all. In other words, it's a wash. Whatever negative impacts on the employment decisions occur because workers are more expensive is offset by the fact you get better retention, higher productivity and stronger consumer spending."

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