The $0.75 increase in Ontario’s minimum wage at the end of March is receiving mixed reactions from students, business owners and economists.

The Ontario Ministry of Labour announced last week the provincial minimum wage is increasing to $10.25 an hour, as part of Ontario's Poverty Reduction Strategy. The initiative “will reduce the number of children living in poverty by 25 per cent over five years,” the ministry said.

The impact of the increase will depend on who is already in the workforce and which businesses are hiring, said Frances Woolley, an economics professor at Carleton.

“For people who have jobs, the increase in the minimum wage is going to be positive because they could expect to see their take-home pay going up,” Woolley said. “For people who don’t have jobs, the [increase] might . . . mean there’s less jobs out there.”

Woolley said companies might cut costs by hiring fewer employees or switching from paid to unpaid breaks to keep labour costs down. If there are fewer jobs available, she said people may consider self-employment, volunteering or going back to school.

“Economists debate this a lot – does it actually make a difference to the number of jobs that there are when the minimum wage goes up? People haven’t agreed on it,” she said.

Woolley also said the impact of the increase will depend on the different labour markets across Ontario. She said in Toronto, for example, where the cost of living tends to be higher and wages are already above the Ontario average, the increase will have less impact than in smaller communities with fewer job opportunities.

“I think the big difference is not how much people want to work, but how much employers are prepared to hire,” Woolley said.

Mike Ivankovic, a second-year psychology student, said with the increase in the minimum wage, he might consider working more if he can find work.

“It’s only a $0.75 increase but [with] a couple more hours every week, by the end of the summer, it’s a good chunk of change,” Ivankovic said. “It’s not anything crazy like a trip to Cuba, but you can treat yourself to something you’d never be able to do before.”

“You also feel like you’re worth more,” he added.

Sheba Schmidt, owner of a small business in Ottawa called West End Kids that sells waterproof outerwear and clothing for children, said her business employs six to eight students, and that the increase in the minimum wage will not be good for her bottom line.

“I’m not happy about it,” she said. “We’re dealing with it and will be fine, but I can’t give the [wage] increases I normally would.”

Schmidt said prices at West End Kids will not go up to cover the higher labour costs, but that her business is looking at ways to increase sales. One idea, she said, is to start an incentive-based program where employees will receive a bonus if they sell more merchandise.