Ontario's minimum wage now $17.20, but the 'real' minimum in London likely more

If you're earning minimum wage in Ontario, you can look forward to a pay raise of just under four per cent starting Tuesday. 

Effective Oct. 1, the minimum hourly wage rises to $17.20, up from $16.55.

For workers who clock 40 hours a week, it means about $1,300 more per year. The increase is built into a provision in provincial legislation that ties the minimum wage to inflation. 

Michael Elliott thinks the "real" minimum wage, the figure that employees need to pay to attract and retain good employees, could be as much as $3 higher. 

Elliott owns Express Employment Professions, a London employment agency that connects companies with job-seekers. He advises employers who intend to pay minimum wage to consider paying at least a few dollars more. 

That's because many industries are struggling to hire and keep workers. By paying a bit more, Elliott said employers can reduce the costs that come with higher employee turnover. 

"If you're insisting on paying your employees low wages, you can expect that turnover because they can go across the street and find themselves another quarter or 50 cents an hour increase," he said. 

And while the increase is good for workers, Elliott said the "real" minimum wage in manufacturing, warehousing and administrative jobs is likely higher. 

"I think it would be safe to say that our new minimum wage is really closer to $20," he said. 

Elliott said with inflation pushing up the cost of everything from food, to fuel to housing, employees are motivated to switch jobs for more money. 

That jives with what Nirav Patel told CBC News. 

He owns Butterbites, a restaurant located in a shopping plaza on Dundas Street East near First Street in east London. He's found that paying his employees anything close to the legislated minimum wage simply leads to more turnover. 

"I think it's a good thing," he said of the higher minimum wage. "It makes employees happy, because inflation and the food costs are rising." 

Patel said he pays a few dollars above the minimum wager for servers and other staff.