The biggest question from Friday’s disappointing Canadian employment report is how much can be traced to Ontario’s sharp minimum wage increase last month.
Canada’s economy lost 137,000 part-time jobs in January, a record monthly decline, led by a drop of 59,000 in Ontario, which was also a record. Ontario saw a net loss of 51,000 jobs.
The numbers are hardly good news for Premier Kathleen Wynne, who increased minimum wages by more than 20 percent on Jan. 1. Big grocers such as Loblaw Cos. and Empire Co. said the wage hike would cost them hundreds of millions of dollars and may accelerate a move to automation like self-serve checkouts. Some smaller restaurant owners also said they would change their menus and juggle shifts as a way of dealing with higher costs.
But economists, and even critics, are reluctant to jump to conclusions based on just one month of data, even though no one is dismissing the possibility that it had an impact.
“The concentration of the job loss in Ontario and the focus upon lost part-time jobs in that province will no doubt feed debate on whether large minimum wage hikes took a toll on employment but proving causality may remain contentious,” Derek Holt, an economist at Scotiabank, said in a note to investors.
No Clear Impact
Wholesale and retail trade lost most jobs in January, followed by professional services
Source: Statistics Canada
Here is a recap of comments:
1. Correction Due
A payback was due for Canada’s labor market in January, after a stellar performance in 2017 that saw the biggest increase in jobs since 2002. The drop in January was the first decline since July 2016, and ended the longest stretch of gains since 2000.
