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By: Joanne Liang
Photo by Unsplash
As of October 1st, 2024, the province of Ontario’s minimum wage has increased from $16.55 to $17.20 per hour. This places Ontario second in provinces with the highest minimum wage, right behind British Columbia with a minimum wage of $17.40.
In the past three years, the province’s minimum wage has risen 14.67% from January 2022’s $15.00 per hour. These decisions are made based on the Ontario Consumer Price Index (CPI) and inflation. This raise has implications for all Ontarians, including those employed, those unemployed, and those currently looking for employment.
Table 1: Ontario's minimum wage increases over the last 15 years (taken from Peninsula Group Limited)
In May of 2024, it was estimated by Statistics Canada that at least 40.4% of Canadians aged 15-19 were in the labor market. For high schoolers, a job is an excellent extracurricular to have, both for honing skills in the workplace and to broaden your postsecondary options. Waterloo AIF and UofT’s supplementary applications are notorious for favoring “out-of-school commitments and extracurriculars”; having real work experience under your belt only solidifies your prospects as an applicant, not to mention the extra income to assist with paying off tuition.
That said, how does this raise fare for the average high schooler? Well, they definitely would see a considerable raise on their cheque. For someone who works, say, sixteen hours a week as a part-timer, the minimum wage increase boosts their bi-weekly paycheck pre-October from $529.60 to $550.40 –– before tax, that is. This raise looks decent on paper to anybody who sees it at first glance. It's enough to treat myself to a McDonalds Big Mac Combo and some more.
However, Ontario’s minimum wage increase is inherently tied to inflation. Just as minimum wage increases, so too does food expenses, entertainment, transportation, and the like. The value of currency decreases because of increased money supply; to balance it out, companies inevitably raise the prices of their products. Whether or not you’re currently employed, this new raise has implications for everyone, because it paves the road for a climb in cost of living.
TL;DR: Not much changes even with the extra money. Referring back to the mini case-study from earlier, twenty-one extra dollars that you earned post-October isn’t as valuable as it would have been pre-October, because cost of living has also increased. Rather than earning extra income and purchasing power, you have instead leveled yourself evenly on the playing game; you’ve obtained just enough income to meet the new living standard.
For everyone as a whole, you will have noticed a considerable rise in prices, nearly everywhere. That is inflation at work. Which leads us to the next question: how much does it impact us?
For part-timers, not much. The minimum wage increase is a small albeit noticeable improvement from the previous $16.55 dollars per hour. If you’re working part-time, money likely isn’t your main reason for working, and 65 cents won’t make a big difference if you have other means of financial support. It also boils down to how many hours a week you work, because the more hours you work, the more noticeable the difference in income becomes.
However, for full-time employees and students without financial support, the situation is vastly different. Let's refer back to my tuition example. Even if you were to hypothetically pay off four years of tuition and live out of your own pocket, you’d still have to have worked at least five years, full-time, under the current wage. Meanwhile, other programs can cost upwards of $120,000 counting for four years and residency. To clarify, this is for undergraduate programs alone. This is, also, not counting for inflation. For these individuals, this new minimum wage still isn’t enough to accommodate the cost of living in Ontario.
Any quick surf on the internet will show you that the vast majority of full-time, hardworking, bill-paying Ontarians agree that a 65 cent raise isn't enough. Some believe that minimum wage should increase by at least $3.00 to meet current living standards.
"There's just no place in Ontario where you could work a minimum wage job full time and be able to pay all your bills.” ––Craig Pickthorne, Director of Ontario Living Wage Network
In conclusion, Ontario’s minimum-wage increase doesn’t actually do much for consumer purchasing power. It’s not necessarily a reason not to go job hunting as a high schooler––there are boundless life lessons and skills you gain from the experience that do justify it––, but I certainly wouldn’t count the extra 65 cents as a real incentive, and it's a whole other can of worms to start discussing the implications from a full-time perspective.