There’s been a lot of resistance by some businesses and lobby groups to the Ontario government’s plans to hike the province’s minimum wage to $15/hour. They claim it will cost employers $13 billion over two years and put many jobs “at risk.”

What they haven’t mentioned is that corporate profits in Ontario are now at record levels and at all-time record shares of the economy. Meanwhile, wage increases continue to stumble along at rates close to inflation, which means no real wage increases at all for most workers.

As reported in Ontario’s Economic Accounts, the net operating surplus of corporations, the closest measure of corporate profits in the economic accounts, in Ontario increased to $133 billion on an annualized basis in the first quarter of this year, up 15 per cent from $116 billion in 2016. This represents an all-time record 16.1 per cent of Ontario’s GDP, eclipsing the previous annual record of 14.6 per cent set last year and far above its long-term average. Ontario corporations could pay for all the costs associated with the minimum wage increase and they’d still be raking in record profits.

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Meanwhile, wages, salaries and other forms of labour compensation are close to record lows as a share of GDP. They dipped to just 51.6 per cent of Ontario’s GDP in the first quarter of this year, not far from the record low set 15 years ago.

The corporate profit share of our national income has been increasing since the early 1980s as a result of business-friendly economic policies, while the share going to workers and labour has been declining. Despite falling unemployment rates, wage increases remain low, labour compensation is shrinking further as a share of national income, and inequalities are rising.

This is undoubtedly a major cause for our current slow growth and economic malaise. Corporations have more than $600 billion in surplus cash they aren’t investing in the economy because the demand isn’t there, while households aren’t spending because wage increases are low.

If we want the economy to grow at a stronger pace, we’re going to need much stronger income growth and labour’s share of our economic pie will need to increase. Many decades of corporate-friendly and anti-labour economic policies are hard to correct in a short time, but increasing the minimum wage to $15/hour is a step in the right direction. Increases to this level in three provinces, Ontario, Alberta and British Columbia, will substantially improve the well-being of almost three million of the lowest-paid workers –– and should also give the economy a badly needed boost.

Some smaller businesses with low or no profits may find the wage increases challenging, especially if they can’t immediately pass on the costs, and some may blame layoffs on the minimum wage increase. However, I expect the overall benefits of higher wages will exceed these more specific losses. We need some substantial measures to kick-start wage and economic growth.

It’s good that Ontario and other provincial governments are considering targeted, temporary measures to help small businesses that might find these increased costs challenging. They should also increase transfers to broader public sector and non-profit employers who will also bear higher costs.

But they should draw the line there and not succumb to pressure from business lobby groups, such as the Ontario Chamber of Commerce, to provide compensating measures for big businesses as well.

As David Macdonald of the Canadian Centre for Policy Alternatives recently reported, a significant majority of low-wage workers in the industries most affected — retail, food and accommodation — are employed by larger corporations with more than 500 employees. Less than 25 per cent of Ontario workers paid less than $15/hour are employed by small businesses.

Loblaws CEO Galen Weston Jr. complained these increases will cost his company $190 million a year, but his company’s net profit has increased at double-digit rates and will likely exceed $1 billion this year. Loblaws has used its extra cash to hike dividends, buy back shares and increase executive compensation. Weston himself was rewarded with $8.5 million in compensation last year, up 69 per cent from the previous year and adding to his $13 billion in net wealth.

Auto parts manufacturer Magna International has also complained about the minimum wage increases, but used its rising profits to increase dividends and buy back shares. CEO Don Walker was rewarded with eye-watering compensation of $26.5 million last year, up 57 per cent from three years previous.

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The list goes on. Tim Hortons, Dollarama and Metro Inc. are all major employers of lower-wage workers. They’ve all enjoyed rising profits and they’ve paid their CEOs ever larger multimillion-dollar annual compensation packets. Their owners have accumulated billions in wealth in part because of the low wages they pay many of their employees. They can afford to pay their workers a decent wage.

Toby Sanger is the senior economist for the Canadian Union of Public Employees.