Minimum wage laws don’t work… but they’re going up another $1.05 in October
IROQUOIS — Farmers in the labour-intensive fruits and vegetable sector are feeling the squeeze on stagnant farmgate prices while hourly wages continue to surge upward.
“That’s the problem when it’s all hand-harvested. Minimum wage keeps going up and we can’t get more for our produce,” Dentz Orchards and Berry Farm co-owner Cathy Dentz says, adding that minimum wage goes up another $1.05 in October.
And the coming wage hike follows a similar increase last year. Minimum wage laws in Ontario require employers to pay a minimum of $15.50 per hour. That will increase to $16.55 per hour on Oct. 1.
“Every year it goes up a dollar,” Dentz exclaimed. “It used to be that minimum wage went up 10 cents, 20 cents, but now it goes up a buck every time, and they’re trying to get it up to $20 per hour. Meanwhile, farms have to absorb all this stuff, and anything that’s hand-harvested, it’s really hard to get your money out, because you can’t charge more to your customers because they can’t absorb that big a jump, and they’re not going to buy it if you charge that much.”
Ontario producers, she noted, “are just expected to absorb” rising labour costs while also trying to compete with cheaper produce from lower-wage countries like Mexico, Chile, Peru and China.
The little known fact about minimum wage laws is that they do not decrease poverty and might even increase poverty, the Fraser Institute reports. Minimum wage laws prevent employers from hiring more workers, decreasing job opportunities, mostly for the young and unskilled and those seeking part-time employment. Employers are less likely to expand their operation.
“The harms of the minimum wage are well-known and have been for decades,” wrote Fraser Institute adjunct scholar Matthew Lau. “Governments should take heed and implement some harm-reduction by freezing – or better yet, reducing – minimum wage rates.”
A 2021 Fraser Institute study found that “92.3 per cent of people earning the minimum wage in Canada do not live in low-income households but rather are secondary earners in households that do not fall below the low-income cut-off line. Therefore, raising the minimum wage won’t lift the vast majority of minimum wage workers out of poverty because, quite simply, they don’t live in poverty.”
The study also found that 53 per cent of people earning the minimum wage are between the ages of 15 and 24, are typically just getting started in the workforce and still living at home with their parents. “Crucially, these minimum wage jobs are often entry-level jobs, which help workers gain experience and skills that lead to higher-paying jobs as their careers unfold,” the report said. “Research also shows that people who work minimum wage tend not to remain in that position over time. In fact, only slightly more than one per cent of people who earn the minimum wage in Canada do so for more than five years.”
