According to the latest Statistics Canada data (published in March), the unemployment rate for youth aged 15-24 in Ontario rose to 16.3 per cent. Youth unemployment has now remained above 15 per cent almost continuously for two years, with only brief dips below that threshold. That means a large number of teens and young adults in the province who want jobs can’t find them. Again, this is a crisis.

For perspective, in the two years prior to the pandemic, the youth unemployment rate generally ranged between 10 and 12 per cent, and generally stayed in that range in the years immediately after the pandemic before the rapid increase that began in 2023.

And yet, despite these dreary numbers, the Ford government plans to increase the minimum wage to $17.95 an hour—which would be a nominal increase of 75 per cent from $10.25 in 2013. By comparison, inflation has totalled approximately 35 per cent over the same period.

Meanwhile, according to a substantial body of evidence, minimum wage hikes harm youth employment. Why? Because young people generally have fewer skills and less experience than older workers, so their labour often commands a lower price. Consequently, minimum wages can make it impractical for businesses to hire young workers who can’t provide value that exceeds the mandated wage floor.

Of course, there are many reasons for the recent surge in youth unemployment in Ontario (sluggish economy, U.S. tariffs, etc.) but the Ford government’s minimum wage hike will make it harder for young people to find jobs and may also have long-lasting consequences. A large body of research shows that when young people struggle to find a first job, develop skills, experience and contacts, there’s often a negative lifelong impact on their labour market outcomes—what economists call the “scarring” effect—which is associated with a lower likelihood of sustained employment and lower wages.

Minimum wage hikes are often politically popular, but governments have a choice whether to follow polling or sound economics. The Alberta government, for instance, recently rejected a proposal to increase its minimum wage from its current level of $15, recognizing the effect on youth unemployment.

Many factors contribute to Ontario’s youth unemployment problem, but some are within the provincial government’s control. The Ford government should stop making matters worse. It should reverse course, cancel the planned minimum wage increase, and avoid further hikes, at least until the province’s youth unemployment rate comes back down to Earth.

Ben Eisen is a senior fellow of Ontario policy studies at the Fraser Institute. 

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