The Night Moves: On Labour Costs, Energy Prices, and Automation in Ontario

Posted By: Joseph Shupac and Karen Fisman

Economists have long tried to identify “goldilocks wages”: ideal compromises in the tradeoff between higher minimum wages and higher rates of unemployment. This is, of course, far more than a theoretical pursuit. With an election coming up in Ontario next year, it represents a significant issue that is likely to spill over from economics into politics. The province plans on raising its minimum wage from $11.40 today to $14 in 2018 and $15 in 2019. Inevitably, this plan gives rise to the question of whether, as a result, more jobs will be being outsourced or automated if employers decide they cannot afford to pay the higher wages. 

So, how susceptible is Ontario to outsourcing or automation? And which of Ontario’s businesses are most likely to benefit from this potential push to automate?

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