Will Higher Wages Mean Fewer Teen Jobs In Canada?

The national dialogue to raise the minimum wage, boosted by legislation in more than a dozen states, continues in the United States. But the conversation and controversy are not confined to the U.S. The Canadian Restaurant and Foodservices Association is warning that the Ontario government’s boost to the minimum wage will result in fewer jobs for a population that is already underemployed.

Ontario’s youth unemployment rate of nearly 17% is well above pre-recession levels. The province’s restaurants employ 200,000 young people under the age of 25, accounting for 20% of all jobs for youth in the province and 45% of the jobs in the industry. 

CRFA agrees with the government’s decision to tie future increases to the Consumer Price Index, but argues that a large, one-time adjustment is tough for small businesses and counter-productive to growth. The 7% increase will cost the average Ontario restaurant $9,440 Canadian per year.

“On one hand, the government is doing the right thing by giving our members the ability to plan for increases, but, on the other hand, they mandate a large increase that wasn’t planned for,” says James Rilett, CRFA v.p.-Ontario. “This will increase costs to the restaurant industry by $287 million Canadian at a time when our members are being hit with a raft of other cost increases.”

CRFA’s members represent more than 30,000 restaurants, bars, caterers, institutions and other foodservice providers. Canada’s restaurant industry annually generates $68 billion Canadian in economic activity and employs more than 1.1 million people.