Ontario Federation of Labour: McGuinty Government Turns Its Back on the Working Poor; Cuts Minimum Wage Increase

TORONTO, ONTARIO--(Marketwire - Feb. 11, 2011) - Today, the McGuinty Government announced plans to cancel increases in the minimum wage for the first time in seven years. Low-income workers had hoped to see their wages reach $10.50 per hour this month to helped off-set the rising cost of living.

"McGuinty's decision to turn his back on Ontario's working poor is utterly disgraceful," said Sid Ryan, President of the Ontario Federation of Labour (OFL). "The McGuinty government is cutting the wages of the most vulnerable workers with one hand while giving handouts to profitable corporations with the other."

In the 2009 Ontario Budget, the McGuinty government announced that he would hand over $4.5 billion to profitable corporations over three years through cuts to the Corporate Income Tax (CIT) and exemptions to the Corporate Minimum Tax (CMT). Taken on top of 2010 CPI increases of 3.3 per cent, the cancellation of this year's minimum wage boost will ensure that real earnings for many people will fall below $10 an hour. This comes at a time when Canadian food banks have seen record usage, with an increase of over seven per cent in Ontario alone.

"The members of the Canadian Federation of Independent Business appear happy to help themselves to public dollars but reluctant to uphold their end of the bargain. If taxpayers are expected to subsidize businesses, the least that can be expected in return is that they pay a living wage," said Ryan. "Not a shred of credible evidence has ever shown that raising the minimum wage actually hurts job growth or the economy."

In 2007, economist Hugh Mackenzie of the Canadian Centre for Policy Alternatives found that: "even in the largely discredited studies cited by critics, there is no evidence that maintaining the real value of the minimum wage impacts employment." These findings were supported by a 2010 study led by University of California, Berkeley economics professor Michael Reich who found that increasing the minimum wage doesn't eliminate jobs in the long or short term.

"Ontario families are being driven to humiliating desperation by rising housing costs, greater transit expenses and skyrocketing electricity prices," said Ryan. "Every penny earned by low income workers is funneled right back into the economy. What better way is there to invest in our communities and to stimulate our economy?"

The Ontario Federation of Labour represents 54 Ontario unions and over one million members.