The President and CEO of the Windsor-Essex Regional Chamber of Commerce says there are pros and cons for local businesses now that minimum wage has increased.
Rakesh Naidu says businesses will have to navigate through this change as those making minimum wage in Ontario will see their hourly wages rise from the current $16.55 per hour to $17.20 per hour - a 65 cent increase as of today.
For those making student wage - which is for those working who are under 18-years-old - will see their minimum wage go from $15.60 per hour to $16.20 per hour.
Naidu says while it's important for wages to increase as the cost of living continues to increase, it can make it hard on businesses, especially those who own their own business, who may need to increase the price of their goods to keep up.
He says they understand why the wage has to increase.
"Costs have gone up, inflation is still high, and people are reeling. So it makes sense that we provide some support for individuals and help them in dealing with the challenges that increased costs has offered."
Naidu says when there are increases some businesses can't absorb everything.
"They're going increase minimum wages, they have other employees that were getting more than minimum wage so there's likely going to be professional wage compression which means that they will have to increase the wages of others who were not making minimum wage - who made more than minimum wage. Now they have to increase the wages in the organization and that further reduces profit margins."
He adds that businesses have to now find ways to bring in more revenue.
"Which can only happen by either cutting costs, cutting services, maybe reducing the total workforce, maybe giving less hours, or increasing prices. And when they increase the prices consumers will have to pay more, and when the cost increases for everything, that can potentially lead us to situations where we could start seeing an inflation increase."
This increase is a 3.9 per cent annualized increase based on the Ontario Consumer Price Index - bringing Ontario's minimum wage to the second highest in Canada behind Nunavut at $19 an hour.
Ontario's minimum wage last increased on October 1, 2023, which was a $1.05 increase.