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

OTTAWA — A new report says sa¹ú¼Ê´«Ã½ should replace its "haphazard and unpredictable" approach to minimum wages across the country with a clear formula based on average incomes.
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A staff member prepares the patio for Friday's reopening at a downtown Ottawa pub, as Ontario prepares to enter the first phase of its reopening plan amidst the third wave of the COVID-19 pandemic, on June 10, 2021. THE CANADIAN PRESS/Justin Tang

OTTAWA — A new report says sa¹ú¼Ê´«Ã½ 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 sa¹ú¼Ê´«Ã½ says provinces should consider pegging adult minimum wages to 50 per cent of average incomes and creating a graduated wage scale for teenagers.

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 sa¹ú¼Ê´«Ã½'s low unemployment rate and high number of job vacancies makes 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."

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

The Canadian Press