For All You "Nay Sayers" about Minimum Wage......

Does high minimum wage kill jobs? Not necessary.

BC probably has the highest minimum wage in the country ($8.00/hr), and our unemployment rate is currently at a 30-year low, at 4.8%.

What is going on here?

Minimum wage does not necessary kill jobs. A lot of times, it has more to do with X-Efficiency. In short, when employers are able to pay their employees more, workers will work harder, more productive, and more satisfy with their jobs. Unhappy workers will only do the very minimal to get by. They will not put in extra effort.

Take a look at the famous Henry Ford example. Ford paid workers more than double of the industry wage, and he had the "happiest" work force in the industry. His work force was the most productive at the time among all car manufacturers.

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Jobless rate matches 30-year low

TAVIA GRANT AND ROMA LUCIW

Globe and Mail Update

POSTED AT 11:59 AM EST ON 10/03/06

The Canadian economy created 24,700 jobs in February, unexpectedly sending the unemployment rate to a three-decade low of 6.4 per cent, Statistics Canada said Friday. All of the new jobs were part-time.

Economists polled by Bloomberg News had expected 22,000 to have been added in the month with the jobless rate holding steady at 6.6 per cent. February's rate is the same as in November, its lowest in 30 years.

A large gain in part-time positions outweighed a drop in full-time jobs, Statscan said. Construction, trades and even manufacturing added to payrolls last month.

Stewart Hall, a market strategist for HSBC Securities (Canada) Inc., said that beneath the upbeat headline, there were a mix of things going on in the February numbers.

“Rather than a ringing endorsement of a robust jobs market,” the lower unemployment rate was driven by a drop-off in the number of people looking for work, and all of the jobs created were part-time, he said. “The report lacks a compelling story either way.”

Like all economic data of late, the report highlights the disparities between Canada's regions. In Alberta, the jobless rate fell to a 30-year-low of just 3.1 per cent as the province rang up its second-largest monthly employment gain ever. In Ontario, unemployment fell to 6.2 per cent — double that of Alberta — because fewer people looked for work. The province lost 17,000 jobs last month.

In the past year, employment has jumped 3.5 per cent in Alberta and British Columbia, double the national rate of employment growth.

Craig Alexander, TD deputy chief economist, said the central bank's hands are tied when it comes to addressing the regional discrepancies across the country, which call for higher rates to limit wage and price pressures in Alberta and lower ones in manufacturing-rich central Canada.

“The central bank has to set policy on the basis of the performance of the national economy, which currently looks to be operating at full capacity, suggesting that a further quarter point tightening may be in the cards in April,” he said.

The prospect of another interest-rate hike on April 25 supported the loonie, sending it to 86.19 cents (U.S.) Friday from Thursday's close of 86.10 cents.

The Bank of Canada raised interest rates for the fifth time in a row by a quarter percentage point to 3.75 per cent on Tuesday, and although it toned down its bullish languages, it signalled that further hikes might be in store.

Canada's labour-force participation rate, a measure of how many people are looking for work, continued its 20-month slide, falling in February by 0.2 percentage points to 67 per cent.

Among provinces, Alberta added 25,000 new jobs in the business, building and other support services, trade, public administration and “other services” industries. Young people received the bulk of February's new jobs, with an increase of 15,000. Wages were up 6.1 per cent from last year as employers competed for scarce labour.

Canada's hourly wage growth was up 3.3 per cent in February, ahead of the 2.8-per-cent increase in inflation as measured by the consumer price index.

British Columbia's unemployment rate fell to 4.8 per cent, also the lowest rate in the last three decades. “Much of the downward trend in the province's unemployment rate is due to a strengthened labour market in the Vancouver area,” the report said.

In Ontario, the unemployment rate fell as youths gave up looking for work. The manufacturing industry, meantime, rebounded from January's steep decline, adding 12,800 positions.

While Ontario factories have shed 81,000 jobs in the past three years because of a strong dollar, rising energy costs and heated competition from abroad, other sectors such as education and construction have picked up the slack. Overall employment in Ontario is 1.4 per cent higher than the same month last year.

Newfoundland and Labrador's jobless rate fell to 15.1 per cent as its economy added 6,000 jobs. The largest increases in employment came from hiring in natural resources and professional, scientific and technical services, Statscan said.

The Canadian economy created 56,300 new part-time positions in February, though it shed 31,600 full-time jobs. At the same time, the private sector added jobs while the public sector lost them.

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