Report recommends linking minimum wage to average income, graduated scale for teenagers

OTTAWA — A new report says Canada should replace its “hazardous and unpredictable” approach to minimum wages across the country with a clear formula based on average earnings.

According to the Conference Board of Canada, provinces should consider setting the adult minimum wage at 50% of average income and creating a sliding salary scale for teens.

He says the formula could be automatically adjusted each year, giving workers and employers greater certainty about future wages.

The Conference Board says the minimum wage formula could be adapted to local economic conditions and adjusted in different regions of a province, much the same way employment insurance benefits are set.

The report says Canada’s low unemployment rate and high job vacancies make this the perfect time to change the way the minimum wage is set.

It says there is evidence that higher minimum wages reduce labor turnover – usually more of a problem during a labor shortage – which is a “considerable burden on employers under the form of training costs and lost productivity ».

This report from The Canadian Press was first published on July 5, 2022.

The Canadian Press