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Published July 6, 2022

Report recommends pegging minimum wages to average incomes, graduated scale for teens

Points to Australia which has a similar economy to ours
Report recommends pegging minimum wages to average incomes, graduated scale for teens

Justin Tang - The Canadian Press

A new report says Canada should replace its "haphazard and unpredictable" approach to minimum wages across the country with a clear formula based on average incomes. 

The Conference Board of Canada says provinces should consider pegging adult minimum wages to 50 per cent of average incomes and creating a graduated wage scale for teenagers.

The board points to Australia which has a similar economy to ours, and where the minimum wage for adults is equivalent to around $19/hr.

A 17-year-old would be entitled to 60 per cent of that wage, rising to 70 per cent on their 18th birthday.

It says the formula could be automatically adjusted every year, giving workers and employers greater certainty over future wages.

The conference board says the minimum wage formula could be tailored to local economic conditions and adjusted within different regions of a province, similar to how employment insurance benefits are set. 

The report says Canada's low unemployment rate and high number of job vacancies make it an ideal time to change how minimum wages are set.

It says there is evidence that higher minimum wages reduce labour turnover — typically more an issue during a labour crunch — which is a "considerable burden to employers in the form of training costs and lost productivity."

banner image: The Canadian Press

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