Don’t believe the spin about January’s job numbers

0330fastfoodBy Pam Frache and Alex Hunsberger

Don’t believe the spin from the business press. StatsCan data show provinces that significantly hiked minimum wage rates in 2017 are doing better than they were this time last year.

What’s more, these provinces are actually outperforming their low-wage counterparts, as their unemployment rates are declining most quickly among the provinces.

Here’s what the Statistics Canada data actually say:

Since January 2017, Canada has ADDED 289,000 jobs while the total number of hours worked has INCREASED by nearly three per cent (2.8%). The national unemployment rate, meanwhile, has DECLINED by 0.8 percentage points, dropping from 6.7% to 5.9%.

In Ontario, unemployment is falling even faster.

The data show employment in Ontario grew by 104,000 jobs year over year and the unemployment rate DECLINED by 0.9 percentage points to 5.5% – a rate of decline that is tied for second-fastest among the provinces. While there were slightly fewer part-time jobs in January 2018 compared to January 2017, these declines were substantially outweighed by a gain of more than 150,000 full-time jobs – a sign of a strengthening labour market. These improvements took place at the same time employers were preparing for the January 1, 2018 minimum wage increase to $14.

In Alberta – the first province to chart a path to a $15 minimum wage – employment rose by 46,000 year over year, as large gains in full-time jobs more than outweighed a modest decline in part-time jobs. Alberta’s unemployment rate has FALLEN by 1.7 percentage points since January of last year – by far the largest decline among the six provinces whose unemployment rate fell during the period.

By contrast, New Brunswick – a province with one of Canada’s lowest minimum wage rates at $11.00 – experienced an absolute drop in the number of jobs by 5,800, pushing the unemployment rate 0.2 percentage points higher to 9.1%. The other three Atlantic provinces – all of which have low minimum wage rates well below $12 per hour – also saw rising unemployment rates.

In Manitoba, where the minimum wage is a mere $11.15, the province experienced a small increase in part-time jobs year over year, partially offset by a decline in full-time jobs. The unemployment rate of 5.6% was just 0.3 percentage points lower than a year earlier.

Clearly, the data released last week contributes to the conclusion that raising minimum wages does not lead to job loss, but in fact can contribute to a stronger economy through increased demand. Moreover, raising minimum wages has a large, direct, positive impact on the incomes of low-wage workers. Suggesting otherwise is intellectually dishonest and ideologically driven.

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